SpiceJet shares jumped 6 percent to Rs 70 on September 23, rebounding after four days of decline. This surge follows the airline’s board approval to issue and allot 48.7 crore shares to qualified institutional buyers (QIBs) at Rs 61 per share.
The move comes as part of SpiceJet’s larger plan to raise up to Rs 3,000 crore, a proposal recently greenlit by shareholders. Struggling with financial and legal hurdles, including grounded aircraft, SpiceJet aims to use the funds to settle outstanding liabilities owed to creditors, aircraft and engine lessors, engineering vendors, and financiers.
This fundraising drive did not rule out further operational hurdles for SpiceJet. The Supreme Court refused to stay an order of the Delhi High Court asking SpiceJet to ground three aircraft engines for non-payment against lessors Team France 01 SAS and Sunbird France 02 SAS. Two aircraft will be grounded due to the supreme court’s decision as it tackles a fleet of currently 21 aircraft.
Though the fresh capital offers temporary relief, SpiceJet’s financial liabilities continue to be a burden for the airline. The airline has accumulated statutory dues of Rs 601.5 crore till September 15. The share issuance proceeds partly will be used to pay the arrears, consisting of Rs 297.5 crore towards TDS, Rs 156.4 crore towards employee provident fund payments, and Rs 145.1 crore towards GST compensation.
Despite these, SpiceJet shares are up 18% year-to-date, marginally outpacing the 16% gain in the Nifty 50 Index. But an airline must always be on its toes to keep its operations stable if it must survive in India’s aviation skies.
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Source: Moneycontrol
News Desk
