New Delhi, 12th July 2023: SpiceJet, a leading low-cost carrier in India, announced on Wednesday that its promoter and Chairman, Ajay Singh, has pledged to inject Rs 500 crore into the airline. This significant capital infusion will be made through the subscription of fresh equity shares and/or convertible instruments. The move is expected to bolster SpiceJet’s financial position and serve as a strong vote of confidence in the airline’s future and long-term viability. The decision to raise fresh capital was approved during a board of directors’ meeting held on July 12, 2023, where Ajay Singh’s offer was accepted. However, the issuance is still subject to the necessary approvals from shareholders, the Securities and Exchange Board of India (SEBI), and other relevant authorities.
With the infusion of this capital, SpiceJet will also become eligible for additional credit facilities worth Rs 206 crore as part of the Emergency Credit Line Guarantee Scheme. Ajay Singh, who also serves as the Managing Director of SpiceJet, expressed his satisfaction with the decision and reiterated his commitment to the company by pledging to invest Rs 500 crore. Singh emphasized the airline’s promising future and the potential for accelerated growth, capitalizing on emerging market opportunities, and driving both revenue and profit expansion. This investment reflects his unwavering dedication to building a sustainable and profitable business. Singh’s confidence in SpiceJet’s long-term success is evident as he enthusiastically embraces the airline’s journey.
To date, SpiceJet has already utilized $50 million from the ECLGS funds it received, along with its own cash reserves, to revitalize its grounded aircraft. Two of the grounded planes, a Boeing 737 and a Q400, have already been restored to service, with more aircraft expected to rejoin the fleet in the near future. The news of increased surveillance by the aviation watchdog DGCA temporarily impacted SpiceJet’s shares during intraday trading on Wednesday, causing an 11% decline. However, the shares later rebounded and closed higher by 4.39% at Rs 31.16 apiece on the BSE.
It is worth noting that SpiceJet has faced financial losses since the fiscal year 2018-19. The airline reported consolidated net losses of Rs 302 crore, Rs 937 crore, Rs 1,030 crore, and Rs 1,744 crore in FY2018-19, FY2019-20, FY2020-21, and FY2021-22, respectively. Additionally, SpiceJet’s financial results for the fiscal year 2022-23 have been delayed due to the medical incapacitation of a key member of its audit committee, as stated in an exchange filing.
Despite the recent challenges faced by SpiceJet, the commitment of its Chairman, Ajay Singh, to inject Rs 500 crore into the airline underscores his confidence in its potential for growth and profitability. With the capital infusion and access to additional credit facilities, SpiceJet is poised to strengthen its financial position and pursue its strategies for expansion. As the airline continues to restore grounded aircraft and regain momentum, it remains focused on its goal of delivering excellent service to passengers and building a sustainable future in the aviation industry.
