FIIs increase stake in Q1: Airline stock under Rs 70 in green as company entered a term sheet for restructuring and settlement with Carlyle Aviation
The stock is up by 91 per cent from its 52-week low of Rs 34 per share.
Today, shares of SpiceJet Ltd gained 5.53 per cent to Rs 64.86 per share from its previous closing of Rs 61.46 per share. The stock’s 52-week high is Rs 77.50 and its 52-week low is Rs34. Today, a total of 60 lakh shares changed hands on BSE.
SpiceJet Limited has entered into a significant restructuring agreement with Carlyle Aviation Management Limited (CAML) to address aircraft lease obligations amounting to USD 137.68 million as of June 30, 2024. The restructuring plan aims to reduce these obligations to USD 97.51 million, subject to further adjustments based on terms to be finalized in a definitive agreement. The restructuring, involving SpiceJet and various lessor entities managed by CAML, will be detailed in definitive documentation and is contingent upon shareholder approval and other regulatory compliances. Under this agreement, part of the outstanding lease arrears will be restructured through the issuance or purchase of securities. Specifically, SpiceJet will issue equity shares priced at Rs 100 per share, not exceeding a total value of USD 30 million. Additionally, CAML and its affiliates will consider purchasing compulsorily convertible debentures (CCDs) of SpiceXpress & Logistics Private Limited, a subsidiary of SpiceJet, valued at USD 20 million, which will rank senior to all other existing and future equity-linked securities of SpiceXpress.
The restructuring is primarily designed to partially offset the outstanding arrears to the Lessors, thereby aiding in deleveraging SpiceJet’s balance sheet and providing a much-needed financial breather. As part of the transaction, SpiceJet will settle accrued but unpaid lease payments and other associated obligations, such as late interest, engine shortfalls, rent, and maintenance costs on grounded aircraft, through the issuance of equity shares and CCDs. The agreement also includes a review and potential amendment of existing lease agreements, covering adjustments to lease periods, monthly rentals, access to maintenance reserves, and provisions for maintenance events and engines.
DSIJ's ‘Penny Pick’ service provides research-backed penny stock recommendations below Rs. 100. If this interests you, do download the service details here.
About SpiceJet Ltd
SpiceJet is India's favourite airline that has made flying affordable for more Indians than ever before. SpiceJet is an IATA-IOSA certified airline that operates a fleet of Boeing 737s & Q-400s and is one of the country's largest regional players operating multiple daily flights under UDAN or the Regional Connectivity Scheme. The majority of the airline's fleet offers SpiceMax, the most spacious economy-class seating in India.
According to Quarterly Results, the company reported net sales of Rs 1,708 crore, operating profit of Rs 49 crore and net profit of Rs 158 crore in Q1FY25. In its annual results, the company reported net sales of Rs 7,085 crore, an operating loss of Rs 644 and a net loss of Rs 424 crore in FY24.
The company has a market cap of over Rs 5,000 crore. According to the shareholding pattern of June 2024, FIIs bought 8,85,885 shares and increased their stake to 1.81 per cent compared to 1.73 per cent in March 2024. The stock is up by 91 per cent from its 52-week low of Rs 34 per share. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.