New Delhi: SpiceJet on Tuesday said that it has received shareholders’ approval to transfer its cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Private Limited (SpiceXpress), 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, said the airline in a statement.
“The transfer of the logistics business will result in a one-time gain of Rs 2555.77 crore for SpiceJet wiping out a substantial portion of the company’s negative net worth,” said SpiceJet.
SpiceJet had a negative net worth of Rs 3300 crore as of June 30, 2021. The negative net worth will reduce to about Rs 745 crore post the transfer of the logistics business.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “The shareholder approval paves the way for our long term plans to take a concrete shape and will result in unlocking significant value for the Company and all its shareholders. The transfer of the logistics business to SpiceXpress will reduce SpiceJet’s negative net worth by INR 2,555.77 crore and strengthen our balance sheet significantly.
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“Post the transfer of the logistics business, the new company will be able to raise capital independently of SpiceJet to fund its growth. We have also received shareholder approval to raise funds through a QIP ensuring our long term growth plans remain intact,” he added.
The proposed transfer, with separate and enhanced management focus, will provide a greater opportunity and flexibility in pursuing long-term growth plans and strategies for SpiceXpress business providing various innovative logistics platforms using fulfilment as a service, said SpiceJet.
“The Company has also received shareholders’ approval to raise funds by issue of eligible securities through Qualified Institutions Placement (QIP). SpiceJet plans to raise INR 2,500 crore through a QIP,” added SpiceJet.
As per the last quarterly segment reporting by the Company ended June 30, 2021, the logistics arm continued with its strong growth story reporting yet another profitable quarter with a Net Profit of Rs 30 crore. The revenue increased by a whopping 285% to Rs 473 crore for the reported quarter compared to Rs 166 crore in the same quarter last year.
SpiceJet’s logistics arm today has a network that spans over 68 domestic and over 110 international destinations including the US, Europe and Africa.
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