Low-cost carrier SpiceJet Ltd. has seen its debt rise to over Rs 4,300 crore due to suspension of operations and an attempt to raise capital.
The company revealed that its current lease and engineering liabilities stand at Rs 3,700 crore, while statutory dues stand at Rs 650 crore.
The airline, which has significantly reduced its fleet from 74 aircraft in 2019 to 28 aircraft by 2024, is looking to raise nearly Rs 2,500 crore through a qualified institutional placement. The company has obtained approval for up to Rs 3,000 crore.
The airline had to resort to reducing its fleet due to the grounding of 36 aircraft due to unpaid dues and financing issues, it said in a presentation to investors.
SpiceJet’s fundraising at the current market price will result in equity dilution of nearly 50%. Despite the fundraising, the company will continue to have a net debt of over Rs 1,000 crore.
The airline plans to raise funds through QIP and Rs 736 crore in issue of warrants to the promoter.
SpiceJet cited rising working capital costs, fixed rents at airports and soaring fixed costs as the key challenges contributing to its financial stress.