SpiceJet on Thursday said that it has secured an additional Rs 316 crore, bringing its total funds raised to Rs 1,060 crore through a preferential share issue. This comes on the heels of its recent decision to cut its workforce by 10-15 per cent.
The airline had previously received Rs 744 crore in January as the first tranche of funds through the allotment of securities on a preferential basis. In December, it had announced plans to raise fresh capital of Rs 2,250 crore through securities issuance.
The airline's Preferential Allotment Committee approved the allotment of 4.01 crore equity shares on a preferential basis to two investors, including Aries Opportunities Fund Limited, and 2.31 crore warrants, offering the option to apply for an equivalent number of equity shares, to four investors, including Elara India Opportunities Fund Limited.
Ajay Singh, Chairman and Managing Director at SpiceJet, stated that the capital infusion bolsters the airline's financial position and growth prospects. The additional funding will assist SpiceJet in pursuing its expansion plans and enhancing its operational capabilities.
Ajay Singh, Chairman and Managing Director of SpiceJet, said, "The Company has raised a total investment of INR 1060 Crore. This significant capital infusion reaffirms investor confidence in SpiceJet's growth prospects and strengthens our financial position for the future. With this additional funding, we are well-equipped to pursue our expansion plans and enhance our operational capabilities."
“The overwhelming response that we have received from investors has been incredibly encouraging. It has broadened our perspective on the potential opportunities ahead.”
However, the airline has been grappling with financial difficulties, leading to the grounding of several aircraft and the return of leased planes to lessors. Some lessors have even taken the airline to court over unpaid lease rentals.
As of February 21, nearly half of SpiceJet's 65-aircraft fleet was grounded, with 35 planes in service and the rest parked, according to aircraft fleet tracking website Planespotter.
In February, SpiceJet announced plans to terminate 1,400 employees, equivalent to 15% of its workforce, as a crucial element of its turnaround and cost-cutting strategy.
In a recent meeting with senior officials, Chairman and Managing Director Ajay Singh emphasized the importance of judicious spending and revealed his personal supervision of major expenditures. The airline is focusing on fleet upgrades, enhancing on-time performance, and implementing cost-cutting measures to streamline operations, as highlighted in an internal memo last month. SpiceJet is actively engaged in fundraising initiatives from diverse investors at present.
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