Carlyle Aviation Restructures SpiceJet Debt to 7.5% Stake in Indian Carrier

25.08.2023 - 14:04 / skift.com / Peden Doma Bhutia

Indian low-cost carrier SpiceJet said it has restructured its outstanding lease rental worth over $100 million to aircraft leasing firm Carlyle Aviation Partners into equity shares and convertible debentures.

SpiceJet’s board of directors approved issuing fresh equity shares of $29.5 million to Carlyle Aviation, following which the aircraft leasing firm will now have over 7.5 percent stake in the Indian carrier.

As a part of the proposed restructuring with Carlyle Aviation Partners, SpiceJet will also exchange its outstanding lease liabilities for an aggregate amount of $65.5 million into convertible debentures of SpiceJet subsidiary — SpiceXpress and Logistics.

“This restructuring will substantially reduce the existing liabilities of the company and will help in fund raising for business operations,” the company said in a note to investors.

The airline further mentioned that the board has proposed raising fresh capital of up to $303 million through eligible securities to qualified institutional buyers, pending approval from company members.

Carlyle Aviation Partners is the commercial aviation investment and servicing arm of Carlyle’s $143 billion global credit platform.

SpiceJet has also agreed to enter into a business transfer agreement with its subsidiary SpiceXpress and Logistics for transfer of its cargo business undertaking on slump sale basis.

“Accordingly, the cargo business shall be exclusively undertaken by SpiceXpress and Logistics effective April 1 or such other date as may be finalized,” the note from the company read.

SpiceJet had earlier announced its plan to transfer its cargo and logistics services on a slump sale basis to its subsidiary SpiceXpress to help the company raise funds independently.

SpiceJet’s total liabilities, as of December 31, stood at $1.7 billion. In the three months that ended December 2022, the company’s logistics arm raked in a net profit of $1.4 million on revenues of $14.5 million.

Skift had earlier reported that Ajay, Singh, the airline’s chairman and managing director, was reportedly in talks with a Middle Eastern carrier and an Indian conglomerate to partially sell a portion of his 60 percent stake in the budget airline.