SpiceJet Restructuring: Carlyle Aviation Partners Converts Debt into Equity at Rs 100/Share

SpiceJet Restructuring: Carlyle Aviation Partners Converts Debt into Equity

SpiceJet's financial landscape is shifting as Carlyle Aviation Partners, the aircraft financing branch of Carlyle Group, agrees to convert a portion of SpiceJet's dues into equity at a valuation of Rs 100 per share. This agreement addresses the airline's pressing financial issues by transforming $137.68 million in obligations into a manageable Rs 97.51 million, post settlement.

Details of the Debt-to-Equity Conversion

• Debt Conversion: Carlyle will convert specific lease obligations, easing SpiceJet's financial load.
• Stake Acquisition: The firm may consider acquiring a stake in SpiceXpress & Logistics via convertible debentures.
• Valuation Insight: The valuation comes at a premium compared to SpiceJet's current trading price, which closed at Rs 61.46.

Implications for SpiceJet

Despite this progress, SpiceJet is struggling with outstanding liabilities of Rs 3,700 crore and statutory dues totaling Rs 650 crore. The airline's market share has plummeted below 4%, operating less than 20 aircraft due to maintenance issues.

SpiceJet’s management noted that resolving lease disputes and restructuring financial commitments will support fleet expansion efforts, allowing the airline to return grounded planes to service, thereby strengthening their market position. As SpiceJet tries to raise Rs 2,500 crore through institutional investor share sales, the road ahead remains challenging.