SpiceJet restructures dues to Carlyle Aviation, to raise fresh capital

In a move that will help reduce its debt by $100 million, cash-strapped SpiceJet on Monday announced that Carlyle Aviation Partners will acquire a 7.5 per cent stake in the airline by converting outstanding dues as well as snap up shareholding in the cargo business.

As it faces multiple headwinds, the no-frills carrier will also tap the Qualified Institutional Buyer (QIB) route to raise up to Rs 2,500 crore.

SpiceJet's board has approved restructuring more than $100 million outstanding dues to aircraft leasing firm Carlyle Aviation Partners into equity shares and Compulsorily Convertible Debentures (CCDs).

Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle's $143 billion Global Credit platform.

Also Read | SpiceJet posts Rs 107 crore profit in December quarter

Fresh equity shares to the tune of $29.5 million (around Rs 244.28 crore) will be issued to Carlyle Aviation Partners at Rs 48 per share or the Sebi-determined price, whichever is higher. Post deal, the lessor will have a 7.5 per cent stake in the airline, according to a statement.

"Carlyle Aviation Partners picking up a stake in our passenger and cargo business reinforces the huge potential of SpiceJet and SpiceXpress. Carlyle partnering with us will tremendously boost our business and this deal would be a transforming moment of change and opportunity for us," SpiceJet Chairman and Managing Director Ajay Singh said.

Further, the carrier will transfer CCDs of SpiceXpress and Logistics Private Ltd (SXPL), held by SpiceJet aggregating to $65.5 million, subject to regulatory approvals. The CCDs will be converted into equity shares of SpiceXpress at an anticipated future valuation of $1.5 billion or Rs 12,422 crore, the company said.

According to the airline, the transaction will retire over $100 million debt and substantially deleverage its balance sheet.

"The transaction will substantially deleverage our balance sheet thereby allowing us to access fresh funds at a competitive rate and we aim to follow suit with other lessors as well in the near term," Singh said.

Separately, the company will enter into a debt restructuring deal with aircraft lessor CLSEC Holdings 10 DAC (affiliate entity of Castlelake).

SpiceJet's board in-principally agreed to acquire two Boeing 737-800 airframes by purchasing the entire share capital of AS Air Lease 41 (Ireland) Ltd from CLSEC Holdings 10 DAC.

At its meeting on Monday, the board decided to seek shareholders' approval to raise fresh capital of up to Rs 2,500 crore/ $301.9 million through an issue of securities to QIBs.

On February 24, the airline reported a multi-fold rise in net profit to Rs 107 crore in the three months ended December 2022, helped by better performance in passenger and cargo businesses.

Shares of SpiceJet closed almost flat at Rs 39.90 apiece on the BSE.