SpiceJet has got a new lifeline as the airline has convinced investors to invest funding of around Rs 2,250 crore in the airline. In this article, we will talk about the Q2 earnings result, massive funding details and what SpiceJet is expected to do with this funding.
SpiceJet Q2 results
The airline had earlier delayed the second quarter earnings result because of some company reasons. Finally, the results are here. The airline posted a net loss of Rs 449.43 crore in second quarter of Financial Year 2024. In the same period last year, the airline lost a total of Rs 833 crore. In 1st quarter of this financial year, the airline posted a slight profit of less than Rs 20 crore.
But with this loss came a hope for the airline, about which, we will talk in the next segment.
SpiceJet gets funding approval
You know what happens in a roller-coaster ride, if you are not aware, you need to study the history of SpiceJet. Since Inception, the airline has navigated through certain challenges. Every time, it is needed to be saved by promoter investment.
In August this year, SpiceJet Managing Director Ajay Singh infused an amount of Rs 500 crore in the airline for day to day operations and operationalizing the grounded fleet.
But now, it seems that the airline is all set to stand on its own feet. The airline board has approved a proposal to raise Rs 2,254 crore through the issuance of up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each. SpiceJet will be issuing convertible warrants to 64 allottees, which include Prabhudas Lilladher Advisory Services, LKP Finance, Martina Developers, and Fincon.
With this, the airline is all set to receive a funding of Rs 2,254 crore. Now, lets have a look at where the airline will use this amount.
Usage of new funding
SpiceJet is struggling financially and is fighting cout cases with various aircraft and engine lessors. The airline recently won a court case against a lessor, who filed an insolvency plea against the airline. It has not paid its staff members since months now and hence, it is expected that the airline use this funding to clear the staff dues first.
Apart from this, the airline is in talks with Boeing to resume deliveries of Boeing 737 MAX aircraft. The airline has more than 200 aircraft on order. It placed this order way before the pandemic. The airline received delivery of last Boeing 737 MAX on 4 March 2019. After which, the Federal Aviation Administration restricted the aerospace major to deliver any Boeing 737 because of 2 deadly crashes suffered by Ethiopian Airlines & Malaysian Lion Air.
When Boeing 737 MAX deliveries resumed, SpiceJet was struggling financially & hence, the airline was unable to take any deliveries. Some frames which were originally destined to SpiceJet were shifted to American airline Southwest and Romanian now defunct airline Blue Air.
Lets wait to see what SpiceJet do with this funding. But it is for sure that the airline has chance to strongify its balance sheet with this massive funding. Do you think SpiceJet is capable to do so or not?