SpiceJet Chairman Ajay Singh will inject ₹500 Crore into the struggling airline via fresh equity shares or convertible instruments.
What Happened? Singh, as promoter, committed ₹500 crore to improve the carrier’s financial stability at a board meeting on Wednesday, SpiceJet said in a press release.
The issue price will be determined in accordance with Securities and Exchange Board of India’s regulations and is subject to approval from relevant authorities, the firm said.
Upon completion of this capital infusion, SpiceJet will become eligible for additional credit facilities of ₹206 crore under the emergency credit line guarantee scheme (ELGS).
SpiceJet said it has already utilised $50 million (₹411 crore) of previously received ECLGS funds, along with its own cash reserves, to revive its grounded aircraft. Two of the firm’s aircraft, a Boeing 737 and a Q400, have successfully returned to operational status, with more planes anticipated to rejoin the fleet in the near future, the company said.
“This investment will allow the airline to accelerate its growth plans and capture new opportunities in the market, grow its revenue and profits,” Singh said in a statement.
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SpiceJet has been facing several financial challenges, including grounded aeroplanes and troubles with aircraft lessors. The budget carrier’s moves are under close scrutiny after rival Go First went into insolvency earlier this year.
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