India's SpiceJet restructures dues to Carlyle Aviation, to raise fresh capital

FILE PHOTO: A SpiceJet Boeing 737 passenger aircraft takes off from Sardar Vallabhbhai Patel international airport in Ahmedabad

BENGALURU (Reuters) -India's SpiceJet Ltd said on Monday it will convert around $100 million in dues to an aircraft lessor into equity and debentures and raise fresh capital of $300 million, sending the shares up as much as 6%.

The low-cost carrier will convert its dues to Carlyle Aviation Partners into new shares worth $29.5 million, giving the commercial aviation investment and servicing arm of Carlyle Group Inc a 7.5% stake in the company.

The airline will also transfer $65.5 million worth of compulsorily converted debentures of SpiceXpress and Logistics to Carlyle Aviation.

Carlyle will convert the debentures of SpiceXpress, a separate airline cargo company owned by SpiceJet, into shares of the cargo business at a later date.

The transaction will cut SpiceJet's debt by over $100 million, it said in a statement.

The company had a net debt of 10.19 billion rupees ($123 million) as of March 2022, while cash and cash equivalents were at 66.08 million rupees as of September-end.

SpiceJet will also seek shareholders' approval to raise fresh capital by issuing securities worth 25 billion rupees ($301.8 million) to qualified institutional buyers. The airline has separately raised another 25.56 billion rupees by hiving off its cargo business, SpiceXpress, into a separate unit, it said.

Shares of SpiceJet jumped as much as 6.4% on the announcement.

The company's plan to raise capital comes as its cash reserves dwindle and new entrant Akasa Air jostles for a share of the market, while rival Air India ramps up its revamp plans with mammoth orders for new aircraft.

SpiceJet's market share slipped to 7.3% in January from 7.7% in December, while IndiGo retained the lion's share of 56.3%. Akasa grabbed 2.8%, while Air India's share was steady at 9.2%, data from the country's aviation regulator showed.

($1 = 82.8280 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Varun H K)