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Business News/ Companies / News/  SpiceJet looking to raise $100 million, promoter Ajay Singh in talks with credit funds: Report
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SpiceJet looking to raise $100 million, promoter Ajay Singh in talks with credit funds: Report

The development comes at a time when India's aviation sector has shown signs of improvement, and analysts pointing out that the prospects of SpiceJet have turned brighter following the grounding of bankruptcy-hit carrier GoFirst.

A SpiceJet passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International Airport in Mumbai, India, May 29, 2023. (REUTERS/Francis Mascarenhas/File Photo) (REUTERS)Premium
A SpiceJet passenger aircraft taxis on the tarmac at Chhatrapati Shivaji International Airport in Mumbai, India, May 29, 2023. (REUTERS/Francis Mascarenhas/File Photo) (REUTERS)

Cash-strapped private carrier SpiceJet is looking to raise around $100 million, a report said on November 28, claiming that the airline's promoter Ajay Singh is in talks with global credit funds in a bid to raise the targeted amount.

The funds would be used to infuse fresh equity in the airline, while also refinancing a part of the promoter debt, Moneycontrol reported, citing sources privy to the development.

“Several global funds are in discussions and talks are currently focussed around the pricing of the loan, which is likely to be structured credit transaction," the publication quoted one of the sources as saying.

SpiceJet was yet to issue a statement in response to the report.

The development comes at a time when India's aviation sector has shown signs of improvement, and analysts pointing out that the prospects of SpiceJet have turned brighter following the grounding of bankruptcy-hit carrier GoFirst.

 In the first quarter of fiscal year 2023-24, SpiceJet reported a standalone net profit of 204.56 crore, as against a net loss of 788.83 crore in the same quarter last fiscal.

Even as the low-cost airline turned profitable, the impending dues and legal challenges could spell trouble if it fails to raise funds, experts underline.

The budget carrier, on November 20, told the Delhi High Court that it risks insolvency if compelled to pay an additional 100 crore to former promoter Kalanithi Maran, and instead proposed an equity issuance to settle his dues.

SpiceJet has been embroiled in a legal dispute over the enforcement of a 2018 arbitral award, which directed the airline to pay 579 crore plus interest to Maran and KAL Airways. The company has contested the award in the high court's division bench.

In the trading session on November 28, SpiceJet's shares were trading at 45.05 at 2:58 pm, higher by 3.14 percent as against the previous closing price.

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Published: 28 Nov 2023, 03:05 PM IST
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