SpiceJet Will Separate Its Cargo And Logistics Business From April 1

SpiceJet Ltd announced on Monday that it has separated off its cargo and logistics business SpiceXpress into a new entity, SpiceXpress and Logistics Pvt Ltd, effective April 1. SpiceJet would benefit from a one-time gain of Rs 2,555.77 crore, significantly decreasing its negative net worth, according to the company. That also paves the possibility for SpiceXpress to seek financing on its own, according to SpiceJet.

SpiceJet Ltd Chairman Ajay Singh stated that the move to separate off SpiceXpress is in line with the company's long-term business plan and would unleash tremendous value for the logistics sector. Singh went on to say that “the separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come”.

SpiceXpress reported a net profit of Rs 51.4 crore for the fiscal year ending December 31, 2023, the company said.

SpiceXpress would discharge the consideration for the slump-sale by issuing securities to SpiceJet in the form of equity shares and compulsorily convertible debentures for an aggregate value of Rs 2,555.77 crore, which will help enhance SpiceJet's financial sheet, it added.

“SpiceXpress will provide greater and differentiated focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth”.Singh said, adding that

he further stated that the spin-off will not only allow SpiceXpress to obtain funds on its own but will also dramatically lower SpiceJet's negative net value. “Having restructured over USD 100 million, outstanding dues to Carlyle Aviation Partner last month, the hive-off will further strengthen and deleverage our balance sheet,” Singh added, "the hive-off will further strengthen and deleverage our balance sheet."