Carlyle to buy 5.91% stake in SpiceJet at Rs 48 per share: Report

Low-cost carrier SpiceJet has reportedly sought shareholder approval to issue 5.91 per cent of its stake to Carlyle Aviation Partners, the aircraft financing unit of private equity giant Carlyle Group.

According to a report in The Economic Times, the leasing firm which has the largest exposure among other lessors, will convert its dues of over $28 million to equity. The airline's share has been valued at Rs 48 per equity share by the lessors, which is higher than the current price of the airline which is trading at Rs 29 at the stock exchange.

The report further mentioned that the company will issue equity shares of 20 per cent to promoter Ajay Singh at Rs 10 per share against the infusion of Rs 500 crore that Singh is making into the company.

The company had earlier announced that its promoter Ajay Singh will infuse Rs 500 crore into the airline. In a statement, SpiceJet said the fresh equity infusion by Singh, who is also the Chairman and Managing Director, will help the carrier in accessing additional credit facilities of Rs 206 crore under the Emergency Credit Line Guarantee Scheme (ECLGS).

"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," Ajay Singh, Chairman and Managing Director, SpiceJet, said.

The budget carrier, which is facing multiple headwinds, including disputes with aircraft lessors, has been looking to raise funds. The airline currently has a 5.4 per cent market share, just ahead of new entrant Akasa Air which has 5 per cent share.

Carlyle, a global aviation leader, partnering with us will tremendously boost our business and this deal would be a transforming moment of change and opportunity for us, Singh told The Economic Times.  

"The transaction will substantially deleverage our balance sheet thereby allowing us to access fresh funds at a competitive rate and we aim to follow suit with other lessors as well in the near term,” he added.

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