SpiceJet has announced the raising of funds worth Rs 744 crore from the first round of funding. A total of two funding rounds were expected to be conducted by the airline. In these rounds, a total of Rs 2,250 crore will be raised by allotment of equity shares and warrants.
SpiceJet Raises Funds Worth Rs 744 Crore
On the occasion of the 75th Republic Day of India, SpiceJet has shared good news with its shareholders and aviation enthusiasts. It is rare for SpiceJet to come out with good news as most of the time, the airline comes into the media because of court cases especially, insolvency pleas filed by aircraft and engine lessors.
On 26th January, the airline announced that it has successfully raised funds worth Rs 744 crore. The budger carrier did so by issuing equity shares and warrants.
In a meeting conducted on January 25th, the Board of Directors approved the allotment of 5.55 crore equity shares to 54 companies. Other than these shares, 9.3 crore warrants were issued to two companies: Elara India Opportunities Fund Limited and Silver Stallion Limited.
This amount was raised in the first round of funding. The airline is also ready for the second round of funding raise. It is awaiting clearance from oversight authorities to give the final approval to raise more funds.
Expanded Fleet and Operations
As it raises more funds, SpiceJet aims to expand its fleet and network. It has already started bringing some of the long-grounded Bombardier Dash 8 to operational status.
According to a report from the Economic Times, the airline has already initiated talks with Boeing to resume deliveries of new Boeing 737 MAX jets. Since 2019, SpiceJet has not received deliveries of any new aircraft because the airline was suffering from a cash crunch. Some airframes that were destined for the carrier went to airlines like Southwest and Blue Air. Blue Air was a Romanian airline, which is now grounded.
With effect from 1 February, SpiceJet will make a grand entry at Ayodhya Airport. This is maybe the first time in the history of Indian aviation, that SpiceJet is starting operations at an airport with this much capacity. It will connect Ayodhya Maharishi Valmiki International Airport to eight Indian cities.
Apart from Metro cities like Delhi, Mumbai, Bengaluru, Chennai, and Ahmedabad, the airline will also connect Ayodhya to Tier-2 cities like Jaipur, Patna, and Darbhanga. Operations to Metro cities will be conducted using a Boeing 737, while Tier-2 cities will be served by 90-seater Dash 8.
Submitted EoI for Acquiring GoFirst
As SpiceJet raises funds, this comes as a piece of good news for not just itself, but for GoFirst as well. SpiceJet promoter Ajay Singh has filed an Expression of Interest (EOI) for the bankrupt airline, GoFirst. He has also submitted a bank guarantee worth Rs 5 crore.
Apart from SpiceJet promoter, two other entities have filed for an EoI to acquire GoFirst. This includes Sharjah-based Sky One Limited and a UK-based lessor named Busy Bee.
Two more companies expressed their intent but failed to meet the minimum criteria. These were US-based NS Aviation and Africa-based Safrik Investments. NS Aviation last year acquired an 85% stake in Turbo Megha Airways Private Limited, or TruJet.
The revival of GoFirst will be a big positive for Indian Aviation. It will also help reclaim lessor’s faith in the Indian judiciary. For instance, it has been one year since the National Company Law Tribunal (NCLT) allowed ownership transfer to Jalan-Kalrock Consortium, the winning bidder of Jet Airways. Now, the Supreme Court has instructed the consortium to pay an additional amount worth Rs 150 crore to banks. As a result, two directors have resigned from the company citing harm to their positions.