Spicejet
Goldman Sachs (Singapore) PTE – ODI has been allotted 5.33% of the shares of the Rs 30 billion Qualified Institutional Placement (QIP) that SpiceJet had on offer.
Société Générale has been allotted 8.33% of the shares of the QIP, the airline informed the stock exchange. It was not immediately clear if Société Générale, one of Europe’s leading financial services group and a major player in the economy for over 160 years, invested in the low cost airline or it is some other entity.
QIP is a capital-raising tool, primarily used in India and other parts of southern Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a qualified investor.
It is a common method of private placement where the company does not dilute the management stake and also does not need to repeat elaborate paperwork like it did during its IPO.
In a statement to the Bombay Stock Exchange on Saturday the Delhi based low cost airline released the names of the five entities which had been allotted more than 5% of the equity offered in the QIP issue.
SpiceJet and IndiGo are the only two airlines listed in India. The other Indian airlines which are not listed include Air India (consisting of three airlines including Vistara and AIX Connect) and Akasa.
Authum Investment & Infrastructure Ltd which was incorporated in 1982 and is a registered Non Banking Financial Company (NBFC) carrying on the business of investment in shares and securities and also financing activities to achieve the goal of enhancing the value for its stakeholders. It was allotted the highest amount of shares among the five entities at 9.33% of the issue.
NBFC is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).
Discovery Global Opportunity (Mauritius) Ltd which is an active company registered in Mauritius was allotted the second highest percentage of shares at 8.33 percent of the size issue.
The new equity follows concerns about the airline’s financial performance.
SpiceJet had set a floor price of Rs 64.79 per share for the sale of its securities. It is looking to raise the money to meet its various obligations including financial troubles, legal issues and grounding of aircraft.
The Directorate General of Civil Aviation put the airline under “enhanced surveillance” on August 29 entailing more spot checks and night surveillance to ensure the safety of the airline’s operations. The airline has grounded more than half of its fleet. “As of June 30 this year of our fleet of 64 aircraft 36 aircraft (constituting 56.25 per cent of the total fleet size) are grounded owing primarily to the alleged default in payments of dues to aircraft lessors and lack of maintenance on such aircraft due to financial constraints and or non-availability of components and spares. Due to smaller size of our fleet after the pandemic, our traffic and market share have both declined,” said the Preliminary Placement Document which had been put out for the QIP. The documents also listed out the financial woes of the airline.
