SpiceJet Share Price Climbs After Announcement of Carlyle's Debt-to-Equity Conversion
SpiceJet's Strategic Restructuring Announcement
SpiceJet shares rose 5.5% on the BSE on Monday, reaching a high of Rs 64.86 following a pivotal restructuring plan. The company announced its intention to convert Carlyle Aviation Management's debt of $137.68 million into equity, with an adjusted settlement figure of $97.51 million.
Details of the Restructuring Agreement
- The term sheet between SpiceJet and Carlyle outlines the conversion of certain aircraft lease obligations.
- Notably, Carlyle is considering a stake in SpiceXpress, SpiceJet's logistics arm.
- This transaction aims to partially deleverage SpiceJet's balance sheet and ease outstanding arrears.
Market and Financial Implications
As the airline grapples with accumulating debts—approximately Rs 3,700 crore in lessor liabilities and Rs 650 crore in statutory dues—the planned share sale targeting Rs 2,500 crore may dilute promoter Ajay Singh's stake significantly. The airline has already seen shares gain 65% over the past year while marking a 5.75% increase this calendar year. The involvement of renowned financial advisors such as ICICI Securities and JM Financial highlights the significance of this capital raise.
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