SpiceJet (SG, Delhi International) has asked shareholders to approve a plan to swap USD28.16 million worth of debt to a lessor into equity, while also issuing shares and warrants in exchange for capital to an entity controlled by SpiceJet majority owner and managing director Ajay Singh.

Earlier this year, ch-aviation reported on a proposal for Carlyle Aviation Partners to take a 5% plus stake in SpiceJet in a debt-to-equity swap, along with accepting an undisclosed amount of convertible debentures. At the time, flagging the debt to equity swap, SpiceJet said it had successfully restructured approximately USD100 million owed to the lessor.

Now, India's Economic Times reports that the SpiceJet board has asked shareholders to approve giving Carlyle a 5.91% stake in the airline. Notably, Carlyle is paying the equivalent of INR48 Indian rupees (USD0.58) per share, a 50% plus premium on SpiceJet's current stock price on the Mumbai Stock Exchange (BSE). Carlyle is to receive equity shares and compulsorily convertible debentures. Reportedly, it plans to convert at least USD8 million worth of those debentures into equity.

According to ch-aviation Commercial Aviation Aircraft Data data, Carlyle is SpiceJet's biggest lessor, with ten aircraft placed at the airline, including seven B737-800s and three B737-900ERs. An August 1 BSE filing by SpiceJet reveals 48,123,186 equity shares will be issued across nine Carlyle special purpose vehicles, each connected with the leases of one or more aircraft. The breakdowns are:

  • 67,00,436 shares to SASOF III (A13) Aviation Ireland DAC;
  • 87,22,473 shares to SASOF III (A6) Aviation Ireland DAC;
  • 22,22,456 shares to SASOF III (C) Aviation Ireland DAC;
  • 20,81,080 shares to SASOF III (E) Aviation Ireland DAC;
  • 63,34,683 shares to SASOF III (A19) Aviation Ireland DAC;
  • 80,56,650 shares to SASOF II (J) Aviation Ireland DAC;
  • 45,51,214 shares to Citrine Aircraft Leasing Limited;
  • 53,34,264 shares to Fly Aircraft Holdings Seven Limited; and
  • 41,19,930 shares to Fly Aircraft Holdings One Limited.

Separately, the SpiceJet board proposes to issue and allot up to 34.1 million shares on a preferential basis to Spice Healthcare Private Limited, an entity controlled by Singh, who recently said he would invest a further INR5 billion (USD60.5 million) into the carrier to strengthen its financial position and maximise growth opportunities. In addition to the shares, SpiceJet proposes to issue 131.5 million warrants to Spice Healthcare. When finalised, the transaction will see Spice Healthcare take a 20.31% stake in SpiceJet, resulting in Singh's shareholding rising from 58.98% to 63.83%. However, around half of Singh's existing stake is reportedly pledged as collateral with financial institutions.

The additional capital is believed to pave the way for SpiceJet to access further funds via the Indian government's Emergency Credit Line Guarantee Scheme (ECLGS).

The board's proposals, which are now subject to a postal vote by shareholders, also include re-appointing Singh as SpiceJet's managing director for a further three years, backdated to May 2023, paying him INR600,000 (USD7,256) per month plus a 2.5% share of the carrier's profits. In addition to Singh, approximately 9% of the airline is held by entities associated with his family, with the remaining shares individually held in stakes not exceeding 1%.