SpiceJet on Tuesday said shareholders have approved the transfer of its cargo and logistics services business to a subsidiary, on a slump sale basis, through an all-share deal worth over Rs 2,555 crore, a move that will help the airline to significantly reduce its negative net worth.
Besides, the shareholders have cleared the proposal to raise up to Rs 2,500 crore through the Qualified institutional placement (QIP) route.
These developments also come at a time when the airline industry is slowly recovering after being battered by the coronavirus pandemic.
In a release, the budget carrier said it has received shareholders' approval to transfer the cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Private Ltd.
It would be done as a going concern on a slump sale basis valued at Rs 2,555.77 crore. The consideration for the slump sale shall be discharged by SpiceXpress by the issuance of its shares in favour of SpiceJet, it added.
“The transfer of the logistics business will result in a one-time gain of Rs 2,555.77 crore for SpiceJet wiping out a substantial portion of the company's negative net worth. SpiceJet had a negative net worth of Rs 3,300 crore as of June 30, 2021. The negative net worth will reduce to about Rs 745 crore post the transfer of the logistics business,” the release said.
In the three months ended June 30, the company's logistics arm raked in a net profit of Rs 30 crore. During the same period, the carrier recorded a net loss of Rs 729 crore.
The release said the logistics arm has a network that spans over 68 domestic and more than 110 international destinations, including the US, Europe and Africa.
According to the airline, the transfer will provide greater and differentiated focus to cargo and logistics business as well as allow raising capital for the business to accelerate its growth.
(With inputs from PTI)