Airline carrier SpiceJet Ltd today announced that it has completed the hive off of its cargo and logistics division into a separate entity, citing the need to boost its cargo business.
The separation of SpiceXpress from its parent entity is effective from April 1, 2023. The hive-off is expected to boost the company's balance sheet and help cut its deficit net worth, SpiceJet said.
The slump sale for SpiceXpress is expected to proceed through the issuance of equity shares and convertible debentures for an amount of Rs 2,555 crore.
"SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth," Ajay Singh, Chairman & Managing Director, SpiceJet, said.
"The decision to hive off SpiceXpress is in sync with our long term business plan and will unlock significant valuation of the logistic business."
SpiceXpress reported a net profit of Rs 51.4 crore for the April-December period of FY23.
"Having restructured over $100 million, outstanding dues to Carlyle Aviation Partner last month, the hive off will further strengthen and deleverage our balance sheet," Ajay Singh Singh said.
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