Struggling SpiceJet to Raise $358 Million - India Report

25.07.2024 - 03:31 / skift.com / Bulbul Dhawan / Rohan Khaunte

Low-cost Indian carrier SpiceJet has secured its board’s approval to raise up to INR 30 billion ($358 million) through institutional investors, a move disclosed in a filing to the Indian stock exchange on Tuesday.

This infusion of funds aims to help the airline reduce its debt and bolster its balance sheet, especially as it grapples with legal battles over unpaid dues to aircraft lessors, vendors, and suppliers.

SpiceJet recently announced a 72% reduction in its net loss versus last year. But, despite this improvement, the airline has posted losses for six straight years.

The financial woes of SpiceJet are further compounded by lessors taking legal action to recover unpaid dues and requesting the country’s aviation regulator to de-register the airline’s planes.

Struggling to raise funds, SpiceJet has faced challenges in getting its grounded jets back in the air, which has led to a loss in market share. In the June quarter this year, SpiceJet’s market share fell to 4.2%, from 14.5% in the same quarter in 2019.

SpiceJet’s Fundraising Efforts: In January, SpiceJet’s board approved a proposal to raise approximately INR 22.5 billion ($268.8 million) from 64 entities. These entities included financial institutions, foreign institutional investors, high net-worth individuals, and private investors.

By February, the airline successfully raised around INR 10.6 billion ($126.6 million) from this effort.

In August of the previous year, SpiceJet’s CEO, Ajay Singh infused INR 5 billion ($60 million) to help revive the airline’s grounded planes.

The tourism minister of the southern state of Karnataka has ruled out the possibility of casinos in the state. While speaking on the tourism policy through 2029, the minister said that the state would not follow the path of opening integrated resorts and gambling facilities in order to attract international visitors. 

Instead, the state is planning to focus on its cultural and natural assets to draw tourists. He also said that Goa has witnessed a flourishing casino industry, but it has led to a negative transformation of the region.

Currently, the Indian coastal state of Goa has 16 land-based and floating casinos, on which the state is currently dependent for tourism, Goa’s tourism minister Rohan Khaunte had said last year. 

However, Goa is also in the process of transforming its tourism positioning, moving from the current image of beaches, nightlife, and parties, to a holistic tourist destination which is suitable for digital nomads, families, and explorers. 

Indian travelers are looking at Kashmir, Himachal Pradesh, and Andaman Islands as preferred tourist destinations during long weekends in August, data from Thomas Cook and SOTC shows. These destinations, while quite