SpiceJet Establishes Separate Cargo and Logistics Business

SpiceJet Ltd announced on Monday that it has spun off its cargo and logistics business, SpiceXpress, into a separate entity named SpiceXpress and Logistics Pvt Ltd as of April 1. The move resulted in a one-time gain of Rs 2,555.77 crore for SpiceJet, which has substantially reduced its negative net worth. This action will also allow SpiceXpress to independently raise funds, according to SpiceJet.

The decision to hive off SpiceXpress is in accordance with SpiceJet’s long-term business strategy and will unlock significant valuation for the logistics business, said Ajay Singh, Chairman of SpiceJet Ltd. “The separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come,” Singh stated.

SpiceXpress reported a net profit of Rs 51.4 crore for the April-December period of FY23. In a bid to enhance the growth of its cargo business and offer more streamlined and efficient service to its customers, SpiceJet Ltd has completed the hive off of its cargo and logistics division ‘SpiceXpress’ into a separate entity, SpiceXpress, and Logistics Private Limited.

SpiceXpress

As per the company, the consideration for the slump sale will be discharged by SpiceXpress through the issuance of securities in the form of equity shares and compulsorily convertible debentures to SpiceJet for a total amount of Rs 2,555.77 crore. This move will also strengthen SpiceJet’s balance sheet, according to the company.

Singh stated that “SpiceXpress will provide greater and differentiated focus to the cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth.” He also stated that the hive-off will not only enable SpiceXpress to raise funds independently, but it will also significantly reduce SpiceJet’s negative net worth. Additionally, he remarked that the hive-off will further strengthen and deleverage the balance sheet of SpiceJet, which restructured over USD 100 million in outstanding dues to Carlyle Aviation Partner last month.

Singh stated that SpiceXpress would offer enhanced and distinct emphasis on cargo and logistics operations, and it could potentially raise funds to expedite its progress. As per his observation, SpiceJet and SpiceXpress possess the immense potential and would be a perfect fit for each other.

Moreover, Singh mentioned that the separation would not only allow SpiceXpress to gather funds autonomously but would also considerably decrease SpiceJet’s unfavorable net worth. He further added that SpiceJet had recently restructured its outstanding liabilities to Carlyle Aviation Partner, amounting to over USD 100 million. Therefore, the hive-off would fortify their balance sheet and assist in reducing their debt.

Also Read: Latest Indian Aviation News and Aviation News

Private & Non-scheduled Charter operators in India

Go through, the Mall of Aviation

For the best HELIPAD CONSULTANCY