Business
SpiceJet Completes Hive Off Of Its Cargo And Logistics Business Into Separate Entity
SpiceJet plane (Pic Via Twitter)
In a bid to boost the growth of its cargo business and provide a more streamlined and efficient service to its customers, SpiceJet has completed the hive off of its cargo and logistics division ‘SpiceXpress’ into a separate entity, SpiceXpress and Logistics Private Limited.
The hive off is effective 1 April 2023 and paves the way for SpiceXpress to raise funds independently, the company said in a statement on Monday (3 April).
"The hive off would strengthen SpiceJet’s balance sheet, wipe out a substantial portion of the Company’s negative net worth and unlock significant value for the Company and its shareholders," the company said.
According to the company, the consideration for the slump sale will be discharged by SpiceXpress by issuance of securities in the combination of equity shares and compulsorily convertible debentures to SpiceJet for an aggregate amount of Rs 2,555.77 crore which will also strengthen the balance sheet of SpiceJet.
“The separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come," said Spicejet chairman and managing director Ajay Singh.
“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 added.
According to the Spicejet CMD, the decision to hive off SpiceXpress is in sync with the company's long term business plan and will unlock significant valuation of the logistic business.
“The hive off will not only enable SpiceXpress to raise cash independently, it will 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.
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