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Budget airline SpiceJet has announced that its Promoter and Chairman & Managing Director Ajay Singh will infuse INR 500 crore in a fresh round of providing financial support to the airline. Singh will invest the money by way of subscribing fresh equity shares and/or convertible instruments.
The airline said that the infusion of fresh capital will substantially strengthen the company’s financial position and its future and long-term viability. It would also be entitled to additional credit facilities of INR 206 Crore under the Emergency Credit Line Guarantee Scheme (ECLGS) scheme of the government.
SpiceJet’s Board of Directors met on July 12 and considered options for raising fresh capital for the Company where Singh, offered to infuse INR 500 Crore.
The Board deliberated on the matter and agreed to issue equity shares and/or convertible securities/equity share warrants on preferential basis to the Promoter and/or the Promoter Group of the Company, on preferential basis, in one or more tranches at an issue price to be determined in accordance with the SEBI ICDR Regulations for an amount of INR 500 Crore subject to the approval(s) of the shareholders of the Company, the Securities and Exchange Board of India and/or any other competent authorities and such other approvals, consent, etc. as may be required in this regard.
On the ocassion, Singh said, “I am pleased to announce that I will infuse INR 500 Crore into the Company. SpiceJet has a bright future and I am committed to helping it achieve its full potential. This investment will allow the airline to accelerate its growth plans and capture new opportunities in the market, grow its revenue and profits. We are committed to building a sustainable and profitable business, and this investment is a reflection of that commitment. I am confident that SpiceJet, a powerful brand which has served passengers for over 18 years, will succeed in the long term and I am excited to be a part of this journey.” The airline is already utilising USD 50 million ECLGS funds that it has already received and its own cash to revive its grounded aircraft. Two of the grounded aircraft, a Boeing 737 and a Q400, have been operationalised so far and more planes are expected to re-join the fleet soon.
According to the regulatory official, the enhanced surveillance includes increased night surveillance and spot checks. The focus is to ensure that due to financial issues, there are no potential adverse impact on the flight operations and that there is no “cutting corners” on safety, the official said on the condition of anonymity.
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