The international airline SpiceJet has successfully spun off its cargo and logistics branch, known as SpiceXpress, into a distinct company. This development paves the road for SpiceXpress to independently raise capital for the business. The airline’s goal is to promote the growth of its cargo business while also providing a service that is more streamlined and efficient to its consumers. With this in mind, the hive-off has been done in order to accomplish both of these goals.
Everything about SpiceJet and SpiceXpress!
From the first of April, the split has been in effect. The airline said that the spin-off would improve its balance sheet, eliminate a sizeable chunk of its negative net worth, and release a large amount of value. SpiceXpress will issue equity shares and compulsorily convertible debentures for a total of ₹2,555.77 crores in order to pay off the balance of the slump selling consideration. Moreover, SpiceJet’s balance sheet is expected to benefit from this sum.
The division of our cargo and logistics sector is a key stage in our growth story, which will be revealed in the coming years, according to the company’s Chairman and Managing Director Ajay Singh. SpiceXpress will give the freight and logistics industry a more distinct focus and make it possible for the company to raise financing to fuel its expansion.
Singh claims that the plan to separate SpiceXpress is in keeping with the long-term commercial strategy of the airline. The SpiceJet MD claimed that separating SpiceXpress will enable it to raise money on its own and drastically lower SpiceJet’s negative net worth.
“The hive-off will significantly strengthen and reduce our debt on our financial statement. Last month, we restructured over $100 million, outstanding dues to Carlyle Aviation Partner” he added. SpiceJet runs a fleet of Boeing 737s, Q-400s, and freighters. A subsidiary of SpiceJet Limited, SpiceXpress, and Logistics Private Ltd offers simple delivery and freight services.
