SpiceJet Approves Rs 2,250-Crore Fundraise From 64 Investors
The company’s board approved issuing 32 crore shares and 13 crore warrants on a preferential basis at Rs 50 apiece.
![<div class="paragraphs"><p>A SpiceJet Boeing 737-800 aircraft. (Source: NDTV Profit)</p></div>](https://media.assettype.com/bloombergquint%2F2019-03%2Fa69f450a-00aa-43f4-aa48-ec8acb0a2f6a%2FReuters_SpiceJety.jpg?rect=0%2C0%2C2284%2C1285&auto=format%2Ccompress&w=200)
SpiceJet has approved raising Rs 2,250 crore by issuing shares and warrants on a preferential basis to 64 investors as the airline ties up funding to ease the cash crunch.
The company’s board approved issuing 32 crore shares and 13 crore warrants at Rs 50 apiece, according to an exchange filing. That’s at a discount to Tuesday's price, as the stock was trading at Rs 57.71 per share at 2:47 p.m.
“This is a significant fund raise and it is designed to strengthen SpiceJet’s financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth in the dynamic aviation sector,” Ajay Singh, Chairman and Managing Director, SpiceJet, said in a release.
The fundraise announcement has come at a crucial time for the airline as it juggles poor operational performance, beaten-down financials and a flurry of litigation.
Investors listed as proposed allottees for the preferential include Elara India Opportunities Fund, Aries Opportunities Fund, Mahapatra Universal Ltd., Nexus Global Fund, Prabhudas Lilladher, Resonance Opportunities Fund, according to the exchange filing.
The board meeting to discuss the matter started on Monday but got delayed to Tuesday as the members couldn't take up all the agenda items, another exchange filing said on Monday. The company on Monday said it will be listing its securities on National Stock Exchange ''soon" to reach a wider investor base.
The low-cost carrier's consolidated net loss narrowed to Rs 449 crore in the quarter ended September from Rs 833 crore a year earlier.
Revenue from operations fell 27% to Rs 1,429 crore in the quarter.
SpiceJet had a domestic market share of 5% in October and it's on-time performance worsened to 58.1% during the month.
Shares of the airline fell as much as 8.7% before paring losses to close 4.2% lower compared to a 0.54% decline in the benchmark Sensex.