SpiceJet is about to sell 5% stake to its largest lessor Carlyle Aviation Partners, with the lessor agreeing to convert its outstanding lease rental into equity. The airline had been in discussions with strategic investors since last year for a stake sale to bring in funds, sources claim.
SpiceJet will also issue convertible debentures in in its newly- formed logistics arm SpiceXpress, which Carlyle can convert to equity at a future date. As part of this exercise, SpiceJet has valued its freighter business at $1 billion.
This deal will help bringing in the much-needed financial stability for the airline as it will reduce a significant amount of the carrier’s debt. Besides the deal is expected to help SpiceJet to deleverage balance sheet for future expansion, people aware of the matter said.
The transaction is expected to reduce the debt of SpiceJet by over $100 million and is likely to aid the company to access fresh funding at competitive rates in future.
SpiceJet has attempted to raise funds several times in the last two years. Last year the airline was engaged with investment bankers to raise up to $200 million to achieve its expansion plans
SpiceJet is also planning to hive off its cargo arm SpiceXpress. The banks and shareholders have already given their approval to hive off SpiceXpress in July 2022. CMD Ajay Singh said the bifurcation will be done by the first week of August. The timeline for this exercise was later postponed to the October-December quarter of 2022 and is now expected to take place in the March quarter, a person aware of the development said.