SpiceJet’s shares were falling on Wednesday after reports that investors are apprehensive of fund infusion into the budget carrier.
What Happened: Liquidity constraints continue at SpiceJet and that it has delayed salaries tax deduction at source (TDS) payments, employee provident fund employees’ provident fund organisation (EPFO) deposits to many of its employees due to lack of funds, CNBC-TV18 reported, citing sources.
Last month, SpiceJet said it has completed raising the first tranche of capital infusion worth ₹744 crore through the allotment of securities on a preferential basis and is currently sitting at its strongest fiscal position ever, with approval to raise more funds in the future.
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Struggling To Stay Afloat: The airline had said its board of directors, in a meeting on January 25, approved the allotment of 5.55 crore equity shares on a preferential basis to 54 subscribers. Additionally, SpiceJet’s Board sanctioned the allotment of 9.33 crore warrants to Elara India Opportunities Fund Limited and Silver Stallion Limited. The warrants offer subscribers the option to apply for an equivalent number of equity shares.
The business news portal also reported that lessors are unwilling to extend aircraft leases due to payment issues. The airline currently operates around 30 aircraft, including eight that are wet-leased from foreign carriers complete with crew and pilots.
SpiceJet has reportedly said that January 2024 salaries for over 75% of staff have already been credited processing of salaries for the rest is underway and the pension fund dues will be deposited shortly as one of its top priorities.
Earlier this week, SpiceJet announced plans to trim its workforce. Approximately 1,400 employees, constituting 10%-15% of its total staff strength, are in line to be laid off.
Price Action: SpiceJet’s share price was down 4.17% in afternoon trade on Wednesday.
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