SpiceJet to get Rs 2,556 cr from SpiceXpress hive off
The shareholders of SpiceJet have approved a resolution to transfer the cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Private Limited.
SpiceJet has also received shareholders%u2019 approval to raise Rs 2,500 crore via qualified institutions placements.
September 21, 2021: The shareholders of SpiceJet have approved a resolution to transfer the cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Private Limited (SpiceXpress).
The consideration for the slump sale (Rs 2,555.77 crore) will be met by SpiceXpress by issuing shares in favour of SpiceJet.
SpiceXpress had reported a 285 percent increase in revenue to Rs 473 crore for the first quarter ended June 30, 2021, and a net profit of Rs 30 crore.
“The transfer of the logistics business will result in a one-time gain of Rs 2,555.77 crore for SpiceJet, wiping out a substantial portion of the company’s negative net worth,” an official statement from SpiceJet said.
SpiceJet had a negative net worth of Rs 3,300 crore as on June 30, 2021, the release added. The negative net worth of the airline will reduce to about Rs 745 crore after the transfer of the logistics business.
SpiceJet has also received shareholders’ approval to raise Rs 2,500 crore via qualified institutions placements (QIPs) via eligible securities.
“The shareholder approval paves the way for our long-term plans to take a concrete shape and will result in unlocking significant value for the company and all its shareholders,” Ajay Singh, chairman and managing director, SpiceJet said.
The new company will be able to raise capital independently of SpiceJet to fund its growth, Singh added.
SpiceXpress has a network over 68 domestic and over 110 international destinations including US, Europe and Africa.
