GURUGRAM:
SpiceJet, India’s favourite airline and the leading logistics platform, has received shareholders’ approval to transfer its cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Private Limited (“SpiceXpress”), as a going concern, on slump sale basis valued at INR 2,555.77 crore. The consideration for the slump sale shall be discharged by SpiceXpress by issuance of its shares in favour of SpiceJet.
The transfer of the logistics business will result in a one-time gain of INR 2555.77 crore for SpiceJet wiping out a substantial portion of the company’s negative net worth. SpiceJet had a negative net worth of INR 3300 crore as on June 30, 2021. The negative net worth will reduce to about INR 745 crore post the transfer of the logistics business.
The transfer of logistics business to SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow raising capital for the business to accelerate its growth. The proposed transfer, with separate and enhanced management focus, will provide greater opportunity and flexibility in pursuing long-term growth plans and strategies for SpiceXpress business providing various innovative logistics platform using fulfilment as a service. It will also assist the management in evaluating the business performance of SpiceXpress as an independent entity while leveraging and unlocking significant value for the Company and its shareholders.
The Company has also received shareholders’ approval to raise funds by issue of eligible securities through Qualified Institutions Placement (QIP). SpiceJet plans to raise INR 2,500 crore through a QIP.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “The shareholder approval paves the way for our long term plans to take a concrete shape and will result in unlocking significant value for the Company and all its shareholders. The transfer of the logistics business to SpiceXpress will reduce SpiceJet’s negative net worth by INR 2,555.77 crore and strengthen our balance sheet significantly. Post the transfer of the logistics business, the new company will be able to raise capital independently of SpiceJet to fund its growth. We have also received shareholder approval to raise funds through a QIP ensuring our long term growth plans remain intact.”
As per the last quarterly segment reporting by the Company ended June 30, 2021, the logistics arm continued with its strong growth story reporting yet another profitable quarter with a Net Profit of INR 30 crore. The revenue increased by a whopping 285% to INR 473 crore for the reported quarter as compared to INR 166 crore in the same quarter last year. The logistics arm today has a network which spans over 68 domestic and over 110 international destinations including US, Europe and Africa.
The remote e-voting on the proposal, sought through postal ballot commenced on 18th August, 2021 and ended on 16th September, 2021. The result of postal ballot was declared on 17th September, 2021.
