SpiceJet has put forward a two-step transaction plan to clear the outstanding debts worth INR 25bn to lessors, reports Economic Times. Looks like the plan aims to turn lessors into potential investors.
According to sources, SpiceJet will first transfer its cargo undertaking to a newly created subsidiary, SpiceXpress. It will then issue compulsorily convertible debentures (CCDs) to the parent company SpiceJet. Then SpiceJet will offer lessors the option to swap lease payments with the CCDs.
During the annual report briefing for 2021-22, SpiceJet Chief Ajay Singh has clarified that the airline had completed most of the settlements with partners, manufacturers and lessors.
In August 2022, Singh had said that the airline would try to raise INR 20bn by way of an equity investment from new investors.
The airline has been steadily making losses prior to pandemic and the global lockdown hit the airline hard. On November 14, 2022 SpiceJet reported a net loss of INR 8.376bn for the Q2 of fiscal 2022-23. Its losses stood at INR 5.617bn in 2021.
SpiceJet had short-term and long-term lease liabilities totalling INR 70bn in the quarter ending September 2022. However, not all of these are due for payment. Sources close to the matter claim that the plan is to clear the immediate dues of the lessors and is proposed to about 10 lessors as of now.