SpiceJet, a cash-strapped private carrier, is attempting to raise roughly $100 million, according to a report on November 28, stating that the airline's founder Ajay Singh is in talks with global credit funds to raise the target amount. It is expected that the funds would be used to inject new equity into the airline while also refinancing a portion of the promoter debt.
"Several global funds are in discussions, and discussions are currently focused on the pricing of the loan, which is likely to be a structured credit transaction," one of the people told the publication.
SpiceJet had yet to respond to the report with a statement. The development comes at a time when India's aviation sector is showing signs of progress, with analysts noting that SpiceJet's prospects have improved following the grounding of bankrupt airline GoFirst. SpiceJet reported a standalone net profit of 204.56 crore in the first quarter of fiscal year 2023-24, compared to a net loss of 788.83 crore in the same quarter last year.
Even if the low-cost airline has become profitable, analysts warn that if it does not raise finances, it would face problems. On November 20, the budget carrier informed the Delhi High Court that if forced to pay a further 100 crore to former promoter Kalanithi Maran, it would face insolvency, and instead proposed an equity offering to repay his debts.
SpiceJet has been mired in a court battle over the enforcement of a 2018 arbitral ruling that ordered the airline to pay Maran and KAL Airways 579 crore plus interest. The award has been challenged by the firm before the high court's division bench. SpiceJet's shares were trading at 45.05 at 2:58 p.m. on November 28, up 3.14 percent from the previous day's closing price.
