SpiceJet Restructures $97M Debt With Carlyle Aviation

On Friday, India’s budget airline SpiceJet announced a major restructuring plan involving its financial obligations to Carlyle Aviation Management. As part of the agreement, SpiceJet will convert approximately $97 million of its dues into equity and debentures. This move is aimed at addressing the airline’s ongoing financial difficulties and operational challenges.

Financial Restructuring Details

The restructuring involves converting a portion of SpiceJet’s aircraft lease obligations, which totaled around $137.68 million as of June 30. The agreement with Carlyle Aviation will adjust these obligations to $97.51 million through settlement or waivers. Specifically, SpiceJet will issue $30 million worth of shares to Carlyle and transfer $20 million worth of compulsorily converted debentures from SpiceXpress, a cargo company owned by the airline.

Ongoing Operational Challenges

SpiceJet has faced significant operational challenges over the past year despite several rounds of fundraising. Recently, the airline was placed under enhanced surveillance by India’s aviation watchdog following an audit that identified “certain deficiencies”. This restructuring deal is part of the airline’s broader efforts to stabilize its financial situation and restore full operations.

Previous Restructuring Efforts

Last year, SpiceJet had undertaken a similar restructuring process with Carlyle Aviation. The latest move reflects the airline’s ongoing strategy to manage its financial obligations amid a challenging economic environment for the aviation industry.

Looking Ahead

The restructuring is expected to provide SpiceJet with some financial relief, allowing it to focus on operational recovery and growth. The adjustment of its debt obligations is a critical step as the airline continues to navigate through financial difficulties and regulatory scrutiny.