 "Amid financial turmoil, SpiceJet seeks to raise Rs 3,000 crore, battling significant dues and investor skepticism.")
SpiceJet, facing significant financial challenges with dues over Rs 601 crore, has successfully attracted interest for its Rs 3,000 crore share sale to qualified institutional buyers. The placement has reportedly been oversubscribed, drawing attention from various investors, including several family offices. The funds raised will be crucial for the airline to settle outstanding statutory liabilities, which include unpaid provident fund contributions and tax obligations. Currently operating with a smaller fleet, SpiceJet aims to use the proceeds not just to clear dues but also to manage debts owed to plane lessors and other creditors. However, the airline’s shares fell by 6.27% on the BSE amid these developments.
SpiceJet Secures Oversubscribed Rs 3,000 Crore Share Placement Amid Financial Struggles
SpiceJet, the Indian low-cost airline, is making strides to overcome significant financial challenges, including statutory dues exceeding Rs 601 crore. The airline recently announced a successful qualified institutional placement (QIP), attracting substantial interest from investors. Reports suggest that the Rs 3,000 crore share sale has been oversubscribed, indicating strong confidence from the Market.
Notable names, such as the family offices of Madhu Kela, Akash Bhanshali, Sanjay Dangi, Rohit Kothari, and Bandhan Bank, have participated in this funding initiative. Despite the positive response, SpiceJet has acknowledged financial constraints, which have hampered its ability to meet statutory obligations consistently.
The company’s preliminary placement document revealed alarming details about its outstanding liabilities, including over Rs 135 crore in unpaid provident fund contributions since April 2020. By September 15, the total statutory dues stood at Rs 601.5 crore, with a significant portion allocated towards clearing various debts. This includes Rs 297.5 crore for Tax Deducted at Source (TDS), Rs 156.4 crore towards employees’ provident fund, and Rs 145.1 crore related to Goods and Services Tax (GST). Additionally, the proceeds from the placement will assist in settling liabilities with creditors, including aircraft lessors and engineering vendors.
While the QIP reflects a vote of confidence from institutional investors, SpiceJet’s shares took a hit, declining 6.27 percent to close at Rs 69.10 on the Bombay Stock Exchange on Wednesday. The coming weeks will be crucial for SpiceJet as it navigates these financial hurdles and aims for recovery.
Last Updated: September 18, 2024, 11:45 PM IST
Tags: SpiceJet, airline news, financial struggles, QIP, investor confidence, stock Market, statutory dues
What is the recent news about SpiceJet’s share sale?
SpiceJet has successfully sold shares worth Rs 3,000 crore, and there were more buyers than shares available, which means the sale was oversubscribed.
Why is SpiceJet’s share sale considered a good response?
The strong demand for the shares shows that investors have confidence in SpiceJet’s future, which is a positive sign for the company.
What does it mean when a share sale is oversubscribed?
When a share sale is oversubscribed, it means that more people wanted to buy the shares than there were shares available, indicating high interest from investors.
How will this share sale benefit SpiceJet?
This share sale will help SpiceJet raise funds that can be used for various purposes, like paying off debts, improving operations, or expanding their services.
Is this a sign of good financial health for SpiceJet?
Yes, the strong demand for their shares suggests that investors believe SpiceJet is on the right track, which indicates better financial health for the company.
