SpiceJet has announced the successful separation of its SpiceXpress cargo and logistics operations into a new company, SpiceXpress and Logistics Private Limited.
With this change, SpiceXpress will be able to independently seek capital and the freight industry is predicted to grow more rapidly. SpiceXpress and Logistics Private Limited will function as a SpiceJet subsidiary beginning in April.
In the statement, it was said that the separation will “strengthen SpiceJet’s balance sheet, wipe out a large chunk of the Company’s negative net worth, and unleash considerable value for the Company and its shareholders.”
SpiceXpress would issue equity shares and compulsorily convertible debentures to SpiceJet for an aggregate sum of 2,555.77 Crore to satisfy the consideration for the slump sale, which will also improve SpiceJet’s balance sheet.
The separation of SpiceJet’s cargo and logistics segment is an important step towards the airline’s expansion, according to Ajay Singh, Chairman and Managing Director, and more advancements are anticipated in the future.
“SpiceXpress will provide the cargo and logistics industry a more distinct emphasis and open up the prospect of acquiring finance to help the company grow more quickly. The choice to separate SpiceXpress is consistent with our long-term business strategy and will significantly increase the logistic firm’s value. SpiceXpress and SpiceJet both have a lot of potential and will work well together.”
“SpiceXpress will be able to raise money on its own thanks to the hive-off, which will also dramatically lessen SpiceJet’s negative net value. The hive-off will further strengthen and deleverage our balance sheet after restructuring over USD 100 million in outstanding debt to Carlyle Aviation Partner last month “Singh continued. (Using data from ANI)
