SpiceJet shares rally over 7% on news of promoter’s investment

On Wednesday, SpiceJet said its promoter Ajay Singh will infuse Rs 500 crore into the company to strengthen the airline’s financial position. The fresh equity infusion will help the carrier in accessing additional credit facilities of Rs 206 crore under the Emergency Credit Line Guarantee Scheme (ECLGS), the company said in a statement.  

The board of SpiceJet considered options for raising fresh capital for the company, where Ajay Singh in order to strengthen the financial position of the company, offered to infuse Rs 500 crore by way of subscription to equity shares and/or convertible securities/equity share warrants on a preferential basis along with the promoter group of the company in terms of Sebi Regulations, 2018. 

SpiceJet had said that Carlyle Aviation Partners would acquire a 7.5% stake in the airline by converting outstanding dues as well as snap up shareholding in the cargo business, a move that will help it reduce debt by USD 100 million in February. The carrier had also announced plans to tap the Qualified Institutional Buyer (QIB) route to raise up to Rs 2,500 crore. 

Royal Airways-promoted SpiceJet is an airline company, which was earlier known as Modiluft. The company is engaged in the business of scheduled air transport services for the carriage of passengers and cargo. SpiceJet has chosen a single-aircraft-type fleet, which allows for greater efficiency in maintenance and supports the low-cost structure. 

The shares are currently trading at Rs 32.21, up by 1.05 points or 3.37% from its previous closing of Rs 31.16 on the BSE. The scrip opened at Rs 33 and has touched a high and low of Rs 33.50 and Rs 32 respectively. So far 41,55,115 shares were traded on the counter.  

The BSE group ‘A’ stock of face value of Rs 10 has touched a 52-week high of Rs 52.40 and a 52-week low of Rs 22.65. The current market cap of the company is Rs 1,938.54 crore. The promoters and Institutions held 58.98% and 41.02% stake in the company respectively. 

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