SpiceJet, a budget airline facing operational challenges, revealed that its top shareholder, Ajay Sing, will inject 5 billion rupees ($60.85 million) to support the company’s efforts in resuming normal operations. The airline is currently struggling to revive a quarter of its grounded fleet due to financial constraints. This development follows weak quarterly results, intense competition, and a string of poor performances.
This additional money is being provided at a time when low-cost airlines in India are attempting to fill the void left by Go First, a competing airline facing difficulties.
SpiceJet has announced its plan to provide Singh with preferred convertible securities, shares, or warrants. Additionally, this agreement grants the airline access to additional credit lines of 2,066 billion rupees through the emergency credit line scheme.
According to exchange data, Singh is also SpiceJet’s managing director and holds 50.6% of the shares in the company.
The investment will accelerate the airline’s growth, open up new market opportunities, and increase both its earnings and profits, as mentioned by Singh in a recent announcement.
SpiceJet is facing challenges from lessors who wish to deregister the airline’s aircraft and start bankruptcy proceedings. Additionally, SpiceJet is currently engaged in a dispute over $46 million of outstanding dues with a former investor.
SpiceJet’s shares have declined by approximately 20% in the current year, whereas IndiGo’s shares have increased by 36%.
