Spice Jet share surge 7% as Promoter commits to invest ₹500 Cr

 

SpiceJet  witnessed a rise of 7% in its shares on Thursday, after its promoter Ajay Singh proposed an investment of ₹500 crores in the company to strengthen its financial position.

In its latest board meeting held on Wednesday, the board of directors of SpiceJet deliberated on options to raise new capital, including a proposal by its promoter Ajay Singh to invest ₹500 crores in the company through equity shares and/or convertible securities or share warrants.

The board of directors of the company has expressed agreement with Singh's proposal to raise this amount based on preferential basis by issuing equity shares and/or convertible securities.

The Securities and Exchange Board of India (SEBI) laws would be followed in determining the issue price of the securities, which may be issued in a single or multiple tranches.

The proposal of Ajay Singh to invest ₹500 crores is subject to approval from the shareholders of SpiceJet, as well as the market regulator SEBI, and other competent authorities, if required.

The aforementioned capital infusion will also be considered as an equity contribution by the promoters of SpiceJet under the Emergency Credit Line Guarantee Scheme (ECLGS) of the Indian government, which will help the company in receiving additional credit facilities of ₹206 crores under the ECLGS scheme. Budget Airline stated on Thursday.

The aforementioned investment, according to SpiceJet's chairman and managing director Ajay Singh, will allow the airline to accelerate its growth ambitions, take advantage of fresh market opportunities, and enhance its revenue and earnings.