SpiceJet says top shareholder Ajay Singh to infuse ₹500 crore in airline

SpiceJet, low-cost carrier, Wednesday said its promoter Ajay Singh will infuse 500 crore ($60.85 million) into the company to strengthen the airline’s financial position.

The fresh equity infusion will help the carrier in accessing additional credit facilities of Rs206 crore under the Emergency Credit Line Guarantee Scheme (ECLGS), the company said in a statement.

“The infusion of fresh capital will substantially strengthen the company’s financial position and is a powerful vote of confidence in its future and long-term viability. It marks a pivotal moment in SpiceJet’s journey towards sustained growth and long-term success,” Spicejet said in a statement.

The board of SpiceJet on Wednesday considered options for raising fresh capital for the company, where Ajay Singh, promoter of the company, in order to strengthen the financial position of the company, offered to infuse Rs500 crore.

“The board deliberated on the matter and agreed to issue equity shares and/or convertible securities/equity share warrants on preferential basis to the promoter and/or the promoter group of the company, on a preferential basis, in one or more tranches at an issue price to be determined in accordance with the SEBI ICDR Regulations for an amount of 500 Crore subject to the approval(s) of the shareholders of the company, the Securities and Exchange Board of India and/or any other competent authorities and such other approvals, consent, etc. as may be required in this regard,” according to the statement.

“I am pleased to announce that I will infuse 500 crore into the company. SpiceJet has a bright future and I am committed to helping it achieve its full potential. This investment will allow the airline to accelerate its growth plans and capture new opportunities in the market, grow its revenue and profits. We are committed to building a sustainable and profitable business, and this investment is a reflection of that commitment,” Ajay Singh said.

Singh—who is the chairman and managing director of the company, also holds a 50.6% stake in the carrier.

The fundraise comes as SpiceJet looks to quell fears of the airline going insolvent after rival GoFirst filed for voluntary bankruptcy. 

Shares of Spicejet on Wednesday finally closed higher by 4.39 per cent or 1.31 to 31.16 apiece on the BSE.

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Updated: 12 Jul 2023, 08:04 PM IST

Article source: https://airlines.einnews.com/article/644216677/pM6AC_HfxJjChFdY?ref=rss&ecode=vaZAu9rk30b8KC5H

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