Indian airline SpiceJet gives lessors shares to clear $28 million dues

BENGALURU (Reuters) -Indian low-cost carrier SpiceJet on Monday said it allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (nearly $28 million), as the troubled airline looks to return to full operations.

The carrier’s shareholders had on Thursday passed a number of resolutions, including a 25 billion rupees fundraise and a preferential issue of shares to lessors to clear outstanding dues.

SpiceJet has been scrambling to raise funds and restore operations for about a fourth of its fleet that has been grounded amid fierce competition in the sector.

The fund crunch and grounded fleet has eroded SpiceJet’s market share to 4.2% as of July – lower than that of new entrant Akasa, which only began commercial operations in August 2022.

SpiceJet, which in February converted around $100 million in dues to aircraft lessor Carlyle Aviation into equity and debentures, still finds itself in legal battles with other lessors over dues.

Moreover, two weeks back, an Indian court ordered the airline to pay $12 million by Sept. 10 to former owner Kalanithi Maran over money owed.

Two months back, SpiceJet’s top shareholder and managing director, Ajay Singh, said he would infuse 5 billion rupees into the company.

Its cash and cash equivalents for the year-ended March 31 stood at 337 million rupees. ($1 = 82.6730 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru; Editing by Savio D’Souza)