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May 20, 2024
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Delhi-based low-cost airline SpiceJet has restructured over $100 million outstanding dues to lessor Carlyle Aviation Partners (CAP). The lessor takes equity shares and compulsorily convertible debentures (CCDs), the airline announced on Monday. Once the transaction is completed, CAP will have over 7.5 percent equity stake in the low-cost airline. Lessor Carlyle swaps debt for 7.5 percent stake in SpiceJet.

The transaction is to be completed once regulatory and shareholder approval is obtained, a SpiceJet official said declining to be identified. Following the announcement, SpiceJet’s shares went up 0.25 percent on the Bombay Stock Exchange (BSE) at Rs 39.80 ($1=Rs 82.91).

The announcement came three days after the low-cost airline reported a Rs 232.8 million net profit, excluding a foreign exchange adjustment of Rs 200 million for the quarter that ended December 31, 2021. SpiceXpress, the airline’s cargo division, reported a net profit of Rs 120 million and revenues of Rs 1,200 million, during the quarter that ended in December 2022.

Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle’s $143 billion Global Credit platform. “The transaction will wipe out over $100 million debt of SpiceJet, thereby strengthening its balance sheet for future expansion. The move will substantially deleverage the Company’s balance sheet,” the airline said. It added that its Board of Directors on Tuesday approved issuing fresh equity shares of $ 29.5 million or Rs 2440.28 million to Carlyle Aviation Partners at Rs 48 per share or the SEBI determined price, whichever is higher.

Following this transaction, Carlyle Aviation Partner will have over 7.5 percent equity stake in SpiceJet Ltd. Additionally, SpiceJet will transfer Compulsorily Converted Debentures (CCDs) of SpiceXpress and Logistics Private Limited (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 12.4220 million. 

Transforming moment

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

Additionally, as a part of restructuring with aircraft lessor CLSEC Holdings 10 DAC (affiliate entity of Castlelake), the SpiceJet Board has in-principle agreed to acquire two Boeing 737-800s by purchasing the entire share capital of AS Air Lease 41 (Ireland) Limited from CLSEC Holdings 10 DAC (affiliate entity of Castlelake), the airline’s statement adds .The Company’s Board has also sought shareholders’ approval to raise fresh capital of up to Rs 25.000 million/$301.9 million through an issue of securities to Qualified Institutional Buyers.

author avatar
Ashwini Phadnis
Former Senior Deputy Editor at Business Line (aka The Hindu Business Line)

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