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Indian LCC Spicejet has launched a major fundraising initiative to shore up its financial position.
The carrier announced its intent to raise INR30 billion ($357 million) through a qualified institutional placement of shares after reporting a profit for the second consecutive quarter on Aug. 14. The equity raise is expected to be completed by the end of September.
Spicejet said this “fresh infusion of funds will be pivotal in enabling the airline to expand and unground its fleet, enhance operational capabilities, settle liabilities and improve its overall market competitiveness … these funds will stabilize the overall operations and allow expansion.”
On July 23, the airline received permission from its board to raise up to INR30 billion through the issue of equity shares or any other eligible securities to qualified institutional buyers.
This follows a previous fundraising effort, with the board approving the issue of shares and warrants worth INR22.4 billion last December. Spicejet is under significant financial pressure. Various creditors have launched court actions against the LCC.
Separately, the carrier reported an INR1.5 billion net profit for the first quarter, up 26% from the INR1.2 billion profit in the previous quarter but down from the INR2 billion profit in last year’s first quarter.
Spicejet has 35 aircraft in service and 26 inactive, according to the Aviation Week Network Fleet Discovery database. Of the total, it has 25 narrowbodies in service—mainly Boeing—and a further 12 narrowbodies inactive.
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