Carlyle Aviation now holds a 7.5% stake in SpiceJet after converting $100 million of outstanding dues into equity. Carlyle also acquired compulsorily convertible debentures in SpiceXpress, the airline’s cargo arm.
SpiceJet will de-merge its cargo business to subsidiary SpiceXpress & Logistics into a new company by April 1, 2023 the company said in a regulatory filing. This sale is expected relieve a huge portion of the company's debt and result in a one-time gain of INR 255.5 million.
Going ahead, SpiceJet said that it will now hold discussions with other lessors to further deleverage its balance sheet.
SpiceJet’s board also approved the issuance of new shares worth $29.5 million to Carlyle Aviation Partners at INR 48 per share. The board also approved a proposal to transfer compulsorily converted debentures (CCDs) of SpiceXpress and Logistics Pvt. Ltd, held by SpiceJet aggregating to $65.5 million to Carlyle Aviation, subject to regulatory approvals. The CCDs will be converted into equity shares of SpiceXpress at an anticipated future valuation of $1.5 billion or ₹12,422 crore, the airline said. These transactions will reduce the total debt of SpiceJet by $100 million.
The airline’s total liabilities were at about INR 14,00 million till December 2022.
“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," said Ajay Singh, chairman and managing director of SpiceJet.
As part of a plan to raise funds to finance growth plans, the board has also sought shareholders’ approval to raise fresh capital of up to $301.9 million through an issue of securities to qualified institutional buyers. The airline had also said last week that it has received about INR 21.1 million under the Emergency Credit Line Guarantee Scheme and is in the process of getting another INR 76.4 million.
Under another restructuring exercise with aircraft lessors, the airline board has also given in-principal approval to the airline to acquire two Boeing 737-800 planes by buying the entire share capital of leasing company AS Air Lease 41 Ltd from its affiliate company CLSEC Holdings 10 DAC.
With this, the airline will now own 15 aircraft, including 13 Q400s and 2 Boeing 737 planes.