SpiceJet mulling equity raise amidst financial turbulence, board meeting on Dec 11
New Delhi, Dec 7 (IANS) SpiceJet will deliberate on raising fresh capital through the issue of equity shares in its Board meeting on December 11, according to a stock exchange filing.
“This is to inform you that the Board of Directors of the Company in its meeting scheduled on December 11, 2023 (Monday) will discuss and consider, inter-alia, options for raising fresh capital through issue of equity shares and/or convertible securities on preferential basis, in accordance with the relevant provisions of applicable laws and subject to approval of the shareholders of the Company and receipt of applicable regulatory approvals, as may be required,” the airline said in its notice.
In a separate announcement, the airline said that the meeting of the Board of Directors of the Company scheduled on December 8, 2023 (Friday) has been postponed and is now rescheduled to be held on December 11, 2023 (Monday) to consider and approve, inter-alia, the unaudited standalone and consolidated financial results for the second quarter ended September 30, 2023.
The low-cost airline in November had informed the Delhi High Court about potential insolvency risks if compelled to pay an additional Rs 100 crore to former promoter Kalanithi Maran.
The airline proposed settling the dues through an equity issuance instead.
During the hearing, the court expressed skepticism over SpiceJet’s insolvency claims, highlighting that such pleas are common among debtors. The court also noted that Maran could not be compelled to accept shares as a settlement. Meanwhile, the court also summoned the airline’s Chairman and Managing Director Ajay Singh to be present in the court on the next hearing.
The case, revolving around the enforcement of a 2018 arbitral award directing SpiceJet to pay Rs 578 crore plus interest to Maran and KAL Airways, has been adjourned to January 10. Maran claims Rs 440 crore in interest, while SpiceJet maintains it has paid Rs 100 crore following a court directive in August, owing only Rs 194 crore more.
Senior lawyer Amit Sibal, representing SpiceJet, had emphasised the airline’s financial distress, citing operational losses, a negative net worth, and employee obligations that could lead to insolvency. Sibal had urged the court to withhold judgement until the division bench rules on the arbitration dispute. The court had raised questions about SpiceJet’s contingency plan should the division bench uphold the arbitral award. Sibal attributed the airline’s financial challenges to the grounding of Boeing 737 Max aircraft, pandemic impacts, and fuel cost spikes due to the Ukraine conflict.