SpiceJet Skyrockets with ₹3000 Crore Fund Injection

SpiceJet Skyrockets with ₹3000 Crore Fund Injection

SpiceJet has raised ₹3,000 crore by selling shares to qualified institutional buyers, offering essential support to the ailing airline. The oversubscribed Qualified Institutional Placement (QIP) attracted investments from foreign firms, including Societe Generale – ODI, Goldman Sachs (Singapore) Pte – ODI, Nomura Singapore Ltd ODI, and Discovery Global Opportunity (Mauritius).

On September 20, SpiceJet’s fundraising committee approved the allocation of over 48.70 crore shares at ₹61.60 each to more than 80 participants in the Qualified Institutional Placement (QIP), as stated in a regulatory filing. The total value of the issued securities is approximately ₹3,000 crore.

Having been in operation for 19 years, SpiceJet is facing numerous challenges, and this new funding will help settle various outstanding dues.

The regulatory filing to the BSE noted that the company’s paid-up equity share capital increased from ₹7,94,67,27,170, consisting of 79,46,72,717 shares, to ₹12,81,68,57,030, with 1,28,16,85,703 shares following the allotment.

Funds from the QIP will be directed towards paying creditors, including aircraft and engine lessors, as well as engineering vendors and financial backers.

Five investors received over 5% of the shares offered in the QIP: Authum Investment and Infrastructure Ltd (9.33%), Discovery Global Opportunity (Mauritius) Ltd (8.33%), Troo Capital (6.67%), Societe Generale – ODI (6.04%), and Goldman Sachs (Singapore) Pte – ODI (5.33%), according to another regulatory filing.

In its preliminary placement document, SpiceJet acknowledged that financial challenges have affected its ability to meet monthly statutory liabilities. The airline has failed to make provident fund payments exceeding ₹135 crore from April 2020 to August 2023.

As of September 15, the carrier’s statutory dues amounted to ₹601.5 crore, and the net proceeds from the placement will assist in settling these debts. This total includes ₹297.5 crore for Tax Deducted at Source (TDS), ₹156.4 crore for employee provident fund contributions, and ₹145.1 crore for Goods and Services Tax (GST).