Shareholders of SpiceJet (SG, Delhi International) have overwhelmingly approved a proposal to raise INR22.5 billion rupees (USD271.2 million) to help extinguish liabilities, fund future growth, and put some ballast in the LCC's balance sheet. Shareholders gave the capital raising the green light during an annual general meeting on January 10, 2024.

SpiceJet's capital raising will entail the issue and allotment of 318,300,000 equity shares of INR10 (USD0.12) each at an issue price of INR50 (USD0.60) per share on a preferential basis, and the issue and allotment of 130,000,000 warrants with an option to apply for and be allotted an equivalent number of equity shares of INR10 each at an issue price of INR50 per share on preferential basis.

99.97% of the 356,396,519 votes cast supported the proposals. In news to cheer the queue of SpiceJet creditors, proceeds from the capital raising will be used to settle past creditor dues, as well as tax bills, fuel bills, and payroll. In addition, part of the funds will go toward reactivating up to 25 parked aircraft and securing additional planes.

Sixty-three entities are participating in the capital raising, including the Mumbai-based Mahapatra family, who will take a combined 21.94% stake in SpiceJet in exchange for coughing up over INR11 billion (USD132.6 million). The Aries Opportunities Fund will acquire a 3.99% shareholding. Other investment funds stepping in to prop up the cash-strapped LCC include Elara India Opportunities Fund and Nexus Global Fund.

As a result, the shareholdings of the current promotor and majority shareholder, Ajay Singh, and the shareholdings of family members and entities associated with him will shrink from 56.5% to 38.55%. The combined shareholdings of the current remaining shareholders, including Carlyle Aviation Partners with a 7% shareholding, will decrease from 43.5% to 35.52%.

“This is a significant fund raise and it is designed to strengthen SpiceJet’s financial position, enhance operational capabilities, settle outstanding issues and position the airline again for sustained growth in the dynamic aviation sector," Singh said in the lead up to the AGM. “We are confident that this capital raise will help us achieve our goal of building a world class airline in India."

Meanwhile, the soon-to-be fiscal again SpiceJet is styling its decision to settle past dues and get more aircraft into the air as "SpiceJet 3.0."