The hive off became effective April 1, 2023 allowing SpiceXpress to raise funds independently

In a bid to boost the growth of its cargo business and provide a streamlined 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.

The hive off became effective April 1, 2023 allowing SpiceXpress to raise funds independently. The hive off would strengthen SpiceJet’s balance sheet, wipe out a substantial portion of the Company’s negative net worth and unlock value for the Company and its shareholders.

The consideration for the slump sale shall be discharged by SpiceXpress by issuance of securities in the combination of equity shares and compulsorily convertible debentures to SpiceJet for an aggregate amount of Rs. 2,555.77 crore which will also strengthen the balance sheet of SpiceJet.

Ajay Singh, Chairman & Managing Director, SpiceJet, said, “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 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. The decision to hive off SpiceXpress is in sync with our long term business plan and will unlock significant valuation of the logistic business. Both SpiceJet and SpiceXpress have great potential and will complement each other well. The hive off will not only enable SpiceXpress to raise cash independently, it will significantly reduce SpiceJet’s negative net worth. Having restructured over $100 million, outstanding dues to Carlyle Aviation Partner last month, the hive off will further strengthen and deleverage our balance sheet.”

During the pandemic, SpiceXpress helped in ensuring that trade routes between India and other countries remained intact. SpiceXpress freighters and cargo planes took to the skies every day to ferry a supplies of relief material, medicines and medical equipment to and from wherever was required.