Southeast Asia is a region in Southeast Asia.
Indonesia
Singapore\sMalaysia
Vietnam\sThailand
Philippines
Myanmar
India
Greater China is a term used to describe a
Asia’s rest
World
Internet Economy & E-Commerce
Technology
Infrastructure and Real Estate
Services in the Financial Sector
Infrastructure for Social Development
SpiceJet’s board of directors will meet in India to consider potential financial options.
Image courtesy of SpiceJet’s website.
Rhik Kundu contributed to this article.
29th of June, 2021
SpiceJet Limited’s board of directors will meet on Wednesday to consider potential alternatives for raising more capital, the airline announced in a stock exchange announcement.
“This is to inform you that the Company’s Board of Directors, at its meeting on Wednesday, June 30, 2021, will discuss and consider, among other things, options for raising fresh capital through the issue of equity shares/debt instruments on a preferential/qualified institutions placement basis….,” the airline stated.
The cash raising comes as a result of the coronavirus outbreak, which has hampered airline operations.
IndiGo and GoAir (formerly Go First) have already begun their fundraising efforts.
According to aviation consulting firm Capa India, Indian airlines are expected to lose $4.1 billion in FY2022, bringing their total losses for FY2021 and FY2022 to almost $8 billion. Many airlines will find it difficult to recover from two years of significant losses.
The board of directors of InterGlobe Aviation Limited, which operates India’s largest domestic airline, IndiGo, approved a qualified institutional placement (QIP) process in May to raise up to 3,000 crore.
According to a draft red herring prospectus (DRHP) submitted with the Securities Exchange Board of India (Sebi) in May, Go First wants to raise up to Rs 3,600 crore through an initial public offering by the end of the year.
According to Bloomberg estimates, SpiceJet Limited is expected to record a combined loss of 96.70 crore and revenue of around 1,950 crore for the March quarter. On Wednesday, the airline will release its March quarter and full-year results for FY21.
When approached, a SpiceJet spokeswoman declined to comment on the airline’s plans to raise money in order to shore up its liquidity.
SpiceJet requires immediate liquidity since it has accumulated dues from vendors and others, according to an analyst studying the aviation sector for a foreign brokerage who spoke on the condition of anonymity.
“QIP, raising debt (albeit the airline is asset-light), and capital infusion from promoters are among the different possibilities available,” the source added.
Following the pandemic, which has drastically reduced travel, Indian airlines have taken a significant impact.
The recovery of aviation passenger traffic could be prolonged by at least 9-12 months due to the second wave of covid-19, according to a recent study report by HSBC Global Research.
“Although the vaccine effort may help to increase demand, the COVID-19 dissemination is much wider this year. Last year’s recovery was considerably stronger in tier-2 and tier-3 cities since COVID-19’s impact was less severe there, but this year’s impact is much more severe across India,” HSBC said, adding that it anticipates 80 million domestic passengers in FY2022, down 44 percent from pre-COVID levels (FY2020).
The original version of this article appeared on livemint.com.
SpiceJet
Every day, you’ll receive articles like these in your email.
Sign up for The Daily Brief, our daily newsletter.
Register for the Newsletter
Related Articles
SpiceJet’s stock surge indicates that investors are betting on a bailout.
SpiceJet’s stock has risen, indicating that its shareholders are unconcerned about the government or a fund set up by it acquiring a substantial equity holding.
Jet, IndiGo, SpiceJet, and Vistara are all interested in privatizing Air India.
Air India, the soon-to-be privatized state-run airline, may attract other domestic airlines.
To continue reading our free content, create an account.
If you don’t want to get The Daily Brief in your inbox every day, unsubscribe.
REGISTER
Do you already have a login? Here is where you may log in.
Continue reading
