Budget carrier SpiceJet announced that its board of directors is scheduled to meet on November 18 to consider and approve a proposal for raising fresh capital. The airline, which has been contending with substantial financial and operational challenges, informed the exchanges of the upcoming meeting in a regulatory filing.
According to the company, the board will explore various avenues for securing funds, including the issuance of equity shares, preference shares, debt securities, or other permissible financial instruments. The carrier noted that these funds could be raised through several methods, such as qualified institutions placement or a preferential issue.
The announcement follows a period of instability for the airline, which has seen it curtail its flight operations. Recent data from the Directorate General of Civil Aviation (DGCA) indicated that SpiceJet’s domestic market share fell to 0.6% in September, down from 1.2% in August. Additionally, the Dubai airport operator recently halted check-in services for the airline citing non-payment of approximately ₹35.85 crore.
Following the disclosure regarding the fundraising meeting, shares of the airline experienced a positive movement in the market. On Friday, the company’s stock rose by nearly 5% to reach ₹8.67 per share during late afternoon trade on the Bombay Stock Exchange (BSE).
Key facts
- The board meeting is scheduled for November 18 to discuss fresh capital infusion.
- Funds may be raised through equity, preference shares, debt securities, or other instruments.
- SpiceJet’s domestic market share dropped from 1.2% in August to 0.6% in September.
- Dubai airport operator suspended SpiceJet check-ins over unpaid dues of ₹35.85 crore.
- Company shares climbed nearly 5% to ₹8.67 on the BSE on November 13.
Why it matters
The proposed fundraising is critical for the airline as it navigates ongoing operational headwinds and regulatory scrutiny. The outcome of the November 18 meeting will be a significant indicator of the carrier's ability to stabilize its financial position and address the mounting dues and service disruptions that have impacted its market presence.
Source: Hindustan Times, The Hindu
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