SpiceJet to use funds to cut liabilities

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₹2,250 crore, which it plans to raise through a preferential issue of shares and warrants, to reduce liabilities accumulated during the covid-19 pandemic and also to clear statutory liabilities. The airline also has plans to spend the funds for expansion of its network with new destinations including Ayodhya and Lakshadweep, chairman and managing director Ajay Singh said on Wednesday while speaking at the company’s 39th annual general meeting via video conference.

Singh said that the airline has faced a difficult phase and is now on the path to recovery. “We will launch flights to Ayodhya soon.

We also have routes to Lakshadweep under Ude Desh ka Aam Naagrik scheme," Singh said, adding that the tourism sector is growing in India and SpiceJet aims to be a part of that growth. In a fresh lifeline for the low-cost airline battling multiple creditors and lessors, the board of SpiceJet Ltd had decided in December to raise over ₹2,250 crore through a preferential issue of shares and warrants.

The airline clarified in the AGM notice that it aims to raise the amount in two tranches of ₹1,591.5 crore by June 2024 and ₹650 crore by July 2025. Under the first tranche, it aims to use ₹360 crore for payment of statutory obligations such as tax deducted at source (TDS), goods and services tax (GST), provident funds (PF), ₹285 crore as settlement with creditors for past dues, ₹355 crore by December 2024 for uplifting and ungrounding of fleet and new fleet acquisition, ₹140 crore for aviation turbine fuel expenses, ₹54.5 crore for employees and ₹397 crore for general corporate purposes.