SpiceJet completes SpiceXpress hive off into separate entity

Airline SpiceJet has completed the hive off of its cargo and logistic division, SpiceXpress, into a separate entity, paving way for the company to raise funds independently. The hive off has been done keeping in mind the airline’s aim to boost the growth of its cargo business as well as provide a more streamlined and efficient service to its customers. 

The separation has been effective from April 1. The airline said that the hive off would strengthen its balance sheet and wipe out a substantial portion of its negative net worth, and unlock significant value. 

The slump sale consideration will be discharged by SpiceXpress through issuance of securities including equity shares and compulsory convertible debentures for an aggregate amount of Rs 2,555.77 crore. This amount is also anticipated to strengthen the balance sheet of SpiceJet. 

Ajay Singh, Chairman & Managing Director, SpiceJet, said, “The separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come. SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth.”

Singh said that the decision to hive off SpiceXpress is in line with the airline’s long term business plan. “Both SpiceJet and SpiceXpress have great potential and will complement each other well,” he said. 

The SpiceJet MD said that hiving off SpiceXpress will allow it to raise cash independently and significantly reduce SpiceJet’s negative net worth. “Having restructured over $100 million, outstanding dues to Carlyle Aviation Partner last month, the hive off will further strengthen and deleverage our balance sheet,” he said. 

SpiceJet operates a fleet of Boeing 737s, Q-400s and freighters. SpiceXpress and Logistics Private Limited is a subsidiary of SpiceJet Limited engaged in hassle-free cargo and delivery services.

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