SpiceJet is in talks with bankers to raise up to $200 million in fresh capital after reporting a wider quarterly loss, the battered Indian airline said in a regulatory filing.
The company, which reported a loss of Rs 7.89 billion ($99 million) in the quarter ended June 30 from Rs. 7.29 billion a year ago, also plans to spin off its cargo business into a separate company, SpiceXpress, by the end of next month.
“Our excellent cargo operations have provided the much-required impetus and we will soon conclude the hive-off of the cargo business into a separate independent company, SpiceXpress, in the current quarter, which will be followed by capacity enhancement with additional freighter aircraft within FY2023,” SpiceJet Chairman and Managing Director Ajay Singh said in the filing.
Separately, the company’s Chief Financial Officer Sanjeev Taneja also resigned, effective immediately. Taneja’s resignation comes as the company has been facing several challenges, including its string of mid-air malfunctions.
India’s aviation regulator has fixed the number of seats SpiceJet can sell at 50% for eight weeks. The regulator has said the company has failed to build “safe, efficient and reliable” air services.
“The industry has been witness to one of the most severe operating environments in the recent past which impacted the progress and recovery,” Singh said. High jet-fuel prices and a depreciating rupee were “major contributors”, he said.
The company’s financial results for Q4 FY2022 and FY2022 were delayed due to a ransomware attack on its systems on May 25 2022.