SpiceJet Chairman Commits Rs 500 Crore Capital Infusion, Boosting Airline’s Financial Position
New Delhi, 12th July 2023: In an announcement made on Wednesday, low-cost carrier SpiceJet revealed that its promoter, Ajay Singh, has committed to infusing Rs 500 crore into the airline. This infusion will take place through the subscription of fresh equity shares and/or convertible instruments. SpiceJet expressed confidence that this capital injection would significantly enhance the company’s financial position and serve as a strong vote of confidence in its future and long-term viability. The board of directors, during a meeting held on July 12, 2023, explored various options to raise fresh capital and accepted Ajay Singh’s offer to infuse Rs 500 crore. The issuance is subject to the approval of the shareholders, the Securities and Exchange Board of India (SEBI), and other competent authorities, as required.
After receiving this injection of capital, SpiceJet will become qualified for additional credit facilities of Rs 206 crore as part of the Emergency Credit Line Guarantee Scheme. Ajay Singh, the chairman and managing director of SpiceJet, expressed his satisfaction with the decision and pledged to invest Rs 500 crore in the company. Singh highlighted the airline’s promising future and his commitment to help it achieve its full potential. He underscored the significance of this investment, highlighting its potential to expedite the airline’s growth strategies, capitalize on emerging market prospects, and fuel both revenue and profit expansion. Singh affirmed his dedication to building a sustainable and profitable business, underscoring that this investment reflected his unwavering commitment to that vision. Singh expressed confidence in SpiceJet’s long-term success and conveyed his enthusiasm for being part of the airline’s journey.
SpiceJet has already utilized $50 million from the ECLGS funds it received, along with its own cash reserves, to revive its grounded aircraft. Two of the grounded aircraft, a Boeing 737 and a Q400, have already been restored to service, with more planes expected to rejoin the fleet in the near future. On Wednesday, SpiceJet’s shares experienced a temporary decline of 11% during intraday trading due to reports of increased surveillance by the aviation watchdog DGCA, reflecting the airline’s recent financial challenges. However, the shares later recovered and closed higher by 4.39% at Rs 31.16 apiece on the BSE.
Notably, SpiceJet has been incurring losses since the fiscal year 2018-19, with consolidated net losses of Rs 302 crore, Rs 937 crore, Rs 1,030 crore, and Rs 1,744 crore in FY2018-19, FY2019-20, FY2020-21, and FY2021-22, respectively. The airline has also delayed the announcement of its financial results for the fiscal year 2022-23 due to the medical incapacitation of a key member of its audit committee, as stated in an exchange filing by SpiceJet.
