SpiceJet completes SpiceXpress hive off, says it will unlock value
1 min read . Updated: 03 Apr 2023, 12:28 PM IST
Premium- This move is expected to enhance growth in the cargo business and will enable SpiceXpress to raise funds independently.
SpiceJet has announced the completion of the hive-off of its cargo and logistics division 'SpiceXpress' into a separate entity called SpiceXpress and Logistics Private Limited.
This move is expected to enhance growth in the cargo business and will enable SpiceXpress to raise funds independently.
Effective in April, SpiceXpress and Logistics Private Limited will operate as a subsidiary of SpiceJet.
"The hive-off would strengthen SpiceJet's balance sheet, wipe out a substantial portion of the Company's negative net worth and unlock significant value for the Company and its shareholders," the release said.
"The consideration for the slump sale shall be discharged by SpiceXpress by the issuance of securities in the combination of equity shares and compulsorily convertible debentures to SpiceJet for an aggregate amount of ₹2,555.77 Crore which will also strengthen the balance sheet of SpiceJet."
According to Ajay Singh, Chairman and Managing Director of SpiceJet, the hive-off of its cargo and logistics division is a crucial step towards the airline's growth, with more developments expected in the future.
"SpiceXpress will provide a greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth. The decision to hive off SpiceXpress is in sync with our long-term business plan and will unlock significant valuation of the logistic business. Both SpiceJet and SpiceXpress have great potential and will complement each other well."
"The hive-off will not only enable SpiceXpress to raise cash independently, but it will also significantly reduce SpiceJet's negative net worth. Having restructured over USD 100 million, outstanding dues to Carlyle Aviation Partner last month, the hive-off will further strengthen and deleverage our balance sheet," Singh added. (With inputs from ANI)