Relief to SpiceJet: Big lessor to convert dues into equity in airline & CCDs in soon to be hived off freighter arm


NEW DELHI: In a boost to SpiceJet, one of its biggest lessors will reportedly convert dues of over $100 million into about 5% stake in the low cost carrier (LCC). Additionally, Miami-based Carlyle Aviation Partners, which has leased 13 Boeing 737s to the airline, will convert a part of dues into CCDs of SpiceXpress at a future valuation of over $1 billion, say people in the know. Similarly, SpiceJet is in talks with other creditors to convert their dues into equity. “Significant reduction in debt will deleverage balance sheet for future expansion,” said sources.
Comments were sought from SpiceJet on Carlyle and awaited till the time of going to press. SpiceJet has been planning to hive off cargo and logistics company SpiceXpress. The airline says this will allow it to raise funds independent of the budget carrier.
“The transaction will wipe out over $100 million debt of SpiceJet, thereby (paving way) for future expansion. The move will substantially deleverage the company’s balance sheet and it to access fresh funding at competitive rates. Fresh equity shares sources said are likely to be issued at a substantial premium to Carlyle,” said sources.
The SpiceJet board will also take up options for raising fresh capital through issue of eligible securities to qualified institutional buyers. The LCC has so far got Rs 350 crore from the government’s emergency credit line guarantee scheme (ECLGS) and is eligible to get upto Rs 1,500 more from that, say sources. “There has been no need to apply for more funds under ECLGS as the October-December 2022 quarter was very good for the entire travel industry, including SpiceJet,” said airline sources. The LCC will announce its Q3 result on Friday. Listed travel companies have been reporting their highest-ever quarterly profits and operating revenue in this bumper travel Q3.
SpiceJet had last August said it is in talks with multiple players for stake sale to raise funds. “The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations,” a SpiceJet spokesperson had said. Promoter Ajay Singh has about 60% stake in the budget carrier. SpiceJet has wet leased seven single aisles this winter after the Directorate General of Civil Aviation (DGCA) lifted the 50% cap, imposed last July, on the airline’s flight operations from October 2022.
Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle’s $143 billion global credit platform. Carlyle Aviation has assets worth $11.5 billion under management.

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