Bengaluru: India’s budget airline, SpiceJet, announced on Tuesday that Carlyle Group’s aviation investment and servicing unit, Carlyle Aviation, has agreed to write off $40.2 million of the airline’s lease arrears. Additionally, Carlyle Aviation will convert $30 million of the arrears into equity at a rate of 100 rupees ($1.19) per share, representing a 56% premium over SpiceJet’s Monday closing price.
Following the announcement, SpiceJet’s shares surged by up to 6%, reflecting investor optimism. This decision comes on the heels of SpiceJet’s previous announcement to convert part of its dues to Carlyle Aviation into equity and debentures. Despite several fundraising efforts over the past year, the airline has struggled to regain full operational capacity, falling behind competitors like IndiGo and Tata-owned Air India in market share.
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SpiceJet confirmed that the conversion will “significantly” increase Carlyle Aviation’s stake in the airline. Currently, Carlyle Aviation holds a nearly 6% stake, though SpiceJet did not disclose the exact post-conversion figure.
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In late August, the Directorate General of Civil Aviation (DGCA), India’s aviation regulator, placed SpiceJet under enhanced surveillance. The move followed an audit that uncovered “certain deficiencies,” prompting closer monitoring of the carrier’s operations.
