SpiceJet to get ₹500 crore from promoter & chairman Ajay Singh

SpiceJet said its promoter and Chairman Ajay Singh will infuse ₹500 crore into the airline, which will help boost its financial position as well as tap additional funds from a government scheme.

The budget carrier, which is facing multiple headwinds, including disputes with aircraft lessors, has been looking to raise funds.

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 ₹206 crore under the Emergency Credit Line Guarantee Scheme (ECLGS).

During the meeting of the airline's board, which considered options for raising fresh capital, Singh offered to infuse ₹500 crore.

The board has agreed to "issue equity shares and/or convertible securities/equity share warrants on a preferential basis to the promoter and/or the promoter group of the company, on a preferential basis, in one or more tranches" for up to ₹500 crore.

"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," Singh said.

The latest development also comes days after the Supreme Court declined to extend the time for making payment to media baron Kalanithi Maran and his Kal Airways in pursuance of an arbitral award of ₹578 crore related to a share-transfer dispute.

Meanwhile, aviation regulator DGCA has put the airline under "enhanced surveillance".

On Wednesday, shares of the airline rose 4.39% to close at ₹31.16 apiece on the BSE.

"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," it said in the statement on Wednesday.

In February, SpiceJet had said that Carlyle Aviation Partners will acquire a 7.5% stake in the airline by converting outstanding dues as well as snap up shareholding in the cargo business, a move that will help it reduce debt by USD 100 million.

The carrier had also announced plans to tap the Qualified Institutional Buyer (QIB) route to raise up to ₹2,500 crore.