SpiceJet completes SpiceXpress hive off

In a bid to boost the growth of its cargo business and provide a more streamlined and efficient service to its customers, SpiceJet Ltd. has completed the hive off of its cargo and logistics division 'SpiceXpress' into a separate entity, SpiceXpress and Logistics Private Limited.

The hive off is effective April 1, 2023 and paves the way for SpiceXpress to raise funds independently. The hive off would strengthen SpiceJet's balance sheet, wipe out a substantial portion of the Company's negative net worth and unlock significant value for the Company and its shareholders.

The consideration for the slump sale shall be discharged by SpiceXpress by issuance of securities in the combination of equity shares and compulsorily convertible debentures to SpiceJet for an aggregate amount of Rs. 2,555.77 Crore which will also strengthen the balance sheet of SpiceJet.

Ajay Singh, Chairman & Managing Director, SpiceJet, said, "The separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come."

"SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth. The decision to hive off SpiceXpress is in sync with our long term business plan and will unlock significant valuation of the logistic business. Both SpiceJet and SpiceXpress have great potential and will complement each other well."

"The hive off will not only enable SpiceXpress to raise cash independently, it will significantly reduce SpiceJet's negative net worth. Having restructured over $100 million, outstanding dues to Carlyle Aviation Partner last month, the hive off will further strengthen and deleverage our balance sheet."

During the pandemic, SpiceXpress played a critical role in ensuring that vital trade routes between India and other countries remained intact. With India's transportation system coming to a virtual halt, SpiceXpress freighters and cargo planes took to the skies every single day to ferry a record supplies of relief material, medicines and medical equipment to and from wherever was required.

Shares of SPICEJET LTD was last trading in BSE at Rs. 30.31 as compared to the previous close of Rs. 30.04. The total number of shares traded during the day was 810543 in over 3706 trades.

The stock hit an intraday high of Rs. 31.42 and intraday low of 29.81. The net turnover during the day was Rs. 24897458.00.

Source : Equity Bulls

Keywords

SPICEJET INE285B01017 Airlines LogisticsDivision HiveOff SpiceXpress