SpiceJet subsidiary SpiceXpress to Receive $100 Million from UK Group
Written by Sanjay Kumar
- CEO: Ajay Singh (21 May 2015–)
- Founders: Ajay Singh, Bhupendra S. Kansagra
- Bag information: In economy, within India, 15kg free. To other destinations, 20kg free, additional allowance depending on route. More SpiceJet bag information
- Founded: 9 February 1984
- Headquarters: Gurugram
- Commenced operations: 23 May 2005; 17 years ago
- Subsidiaries: Spicexpress and Logistics Private Limited, Travenues Innovations Private Limited
SpiceJet’s subsidiary, SpiceXpress and Logistics, is set to receive a substantial investment of USD 100 million from the SRAM & MRAM Group, a UK-based company. This investment comes at a crucial time for the airline, as it recently decided to hive off SpiceXpress due to financial challenges and an insolvency plea from an aircraft lessor.
“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 had said.
In a recent announcement, SpiceJet clarified that it has no intentions of filing for insolvency and plans to invest USD 50 million to revive 25 grounded planes. As part of this investment scenario, the SRAM & MRAM Group has committed to injecting USD 100 million into SpiceXpress, as reported by PTI.
A Memorandum of Understanding (MoU) has been signed between SpiceJet and the SRAM & MRAM Group, as confirmed by an official statement from SpiceJet on Monday (May 15). This development follows a debt restructuring agreement between SpiceJet and aircraft lessor Carlyle Aviation Partner. As part of the agreement, Carlyle Aviation Partner acquired a stake in SpiceXpress at an expected future valuation of USD 1.5 billion (INR 12,422 crore).
Ajay Singh, Chairman and Managing Director of SpiceJet, expressed optimism about the USD 100 million investment, stating that it will enable SpiceXpress to expand and provide a more streamlined and efficient service to its customers, according to PTI reports.
The SRAM & MRAM Group has diverse business interests that span various sectors such as agriculture, agro-food products, neural networks, artificial intelligence, hedge fund management, hospitality services, media, publishing, and more.
During this month, five SpiceJet planes have faced deregistration requests from lessors. This development comes at a time when crisis-hit competitor Go First has ceased operations and initiated resolution proceedings under the insolvency law.
In conclusion, the USD 100 million investment from the UK-based SRAM & MRAM Group marks a significant milestone for SpiceJet’s subsidiary, SpiceXpress and Logistics. This infusion of funds is expected to strengthen SpiceJet’s financial position, unlock value, and support the expansion of SpiceXpress. Despite ongoing challenges such as plane deregistration and the closure of Go First, this investment instills hope for SpiceJet’s future and demonstrates the confidence of investors in its growth potential.
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