India's SpiceJet restructures dues to Carlyle Aviation, to raise fresh capital

India's SpiceJet said on Monday it will convert around $100m in dues to an aircraft lessor into equity and debentures and raise fresh capital of $300m, sending the shares up as much as 6%. The low-cost carrier will convert its dues to Carlyle Aviation Partners into new shares worth $29.5m, giving the commercial aviation investment and servicing arm of Carlyle Group a 7.5% stake in the company. The airline will also transfer $65.5m worth of compulsorily converted debentures of SpiceXpress and Logistics to Carlyle Aviation. Carlyle will convert the debentures of SpiceXpress, a separate airline cargo company owned by SpiceJet, into shares of the cargo business at a later date. The transaction will cut SpiceJet's debt by over $100m, it said in a statement. The company had a net debt of 10.19b rupees ($123m) as of March 2022, while cash and cash equivalents were at 66.08m rupees as of September-end. SpiceJet will also seek shareholders' approval to raise fresh capital by issuing securities worth 25b rupees ($301.8m) to qualified institutional buyers. The airline has separately raised another 25.56b rupees by hiving off its cargo business, SpiceXpress, into a separate unit, it said. Shares of SpiceJet jumped as much as 6.4% on the announcement. The company's plan to raise capital comes as its cash reserves dwindle and new entrant Akasa Air jostles for a share of the market, while rival Air India ramps up its revamp plans with mammoth orders for new aircraft.<br/>