Singh offers lifeline to SpiceJet

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₹500 crore from its promoter Ajay Singh, offering a lifeline to the financially-beleaguered budget airline. Singh will infuse the funds by subscribing to fresh equity shares and/or convertible instruments. The decision was made at SpiceJet’s board meeting on Wednesday to consider various options to raise funds either by selling shares or convertible securities on a preferential basis or both.

The airline, which is struggling due to poor finances, has yet to declare earnings for the March quarter and for the financial year ended 31 March. Post the six-hour-long board meeting, SpiceJet announced Singh’s decision to strengthen the airline’s financial position. The airline board has agreed to issue equity shares and/or convertible securities/equity share warrants on preferential basis to Singh, on preferential basis, in one or more tranches at an issue price to be determined in accordance with the Securities and Exchange Board of India regulations, according to the airline.

SpiceJet said the decision is subject to approval from shareholders, Sebi, and any other concerned competent authorities. As the fundraising will be considered as equity contribution by the promoters, SpiceJet will also be entitled for additional credit facilities of ₹206 crore under the Emergency Credit Line Guarantee Scheme (ECLGS) of the government. “SpiceJet has a bright future and I am committed to helping it achieve its full potential.