SpiceJet shares jump 20% to 15-month high: What's driving rally
SpiceJet's shares skyrocketed to a 15-month high at Rs. 52.29 on the BSE, hitting the 20% upper circuit, as the airline unveiled plans to explore fundraising options. According to a filing on Wednesday, SpiceJet's board will convene on December 11 to discuss and approve raising new capital through the issuance of equity shares and/or convertible securities on a preferential basis. Since its 52-week low at Rs. 22.65 made in May, the stock has rebounded over 130% to date.
Board meeting to discuss capital raise and Q2 results
The December 11 board meeting will not only focus on fundraising but also review and approve the September quarter results for the debt-ridden company. SpiceJet has been seeking ways to secure capital as part of its fleet remains partially grounded, with at least three aircraft lessors initiating insolvency proceedings against the airline.
SpiceJet has more good news on settlement with Celestial Aviation
The National Company Law Tribunal (NCLT) granted additional time to aircraft lessor Celestial Aviation and low-cost airline SpiceJet on Thursday to settle the matter. Representatives from both parties informed the tribunal that Spicejet had made some payments to Celestial Aviation and requested an adjournment for further resolution. In August, Celestial Aviation approached the tribunal to initiate insolvency proceedings against SpiceJet for defaulting on payments of $29.9 million for nine aircraft.
NCLT rejected one insolvency plea against SpiceJet
This Monday, the NCLT rejected Willis Lease Finance Corporation's (WLFC) insolvency plea against SpiceJet. Willis Lease Finance Corporation claimed SpiceJet defaulted on $6.58 million for 11 engines. SpiceJet argued that WLFC lacked the right to file an insolvency plea as it wasn't an operational creditor or debt assignee. SpiceJet pointed out WLFC's service agreement with engine lessors, arguing that WLFC couldn't file for insolvency against the airline.
Other recent developments and financial performance
In July, SpiceJet promoter Ajay Singh injected Rs. 500 crore into the company by purchasing equity shares. Last month, InterGlobe Aviation co-founder Rakesh Gangwal was said to be in advanced discussions to acquire a big stake in SpiceJet. For the quarter ending June, the airline posted a consolidated revenue of Rs. 2,004 crore, compared to Rs. 2,145 crore in the previous quarter, and a profit of Rs. 197 crore against a loss of Rs. 6.2 crore in the prior quarter.
