MUMBAI: SpiceJet Limited said on Monday, April 3, that as of April 1st, it had divided its SpiceXpress cargo and logistics business into a new company called SpiceXpress and Logistics Private Limited. SpiceJet reported a one-time gain of Rs. 2,555.77 crore as a result of the transaction, significantly improving its net worth. Also, it provides the possibility for SpiceXpress to independently raise fund, SpiceJet said.
SpiceJet Limited Chairman Ajay Singh stated that the decision to split off SpiceXpress "is in harmony with the company's long-term business plan and will unleash tremendous valuation of the logistic sector."
"The separation of our cargo and logistics branch is a stepping stone in our growth story, which shall unfold in the times to come," added Singh. SpiceXpress recorded a net profit of 51.4 crore rupees for the months of April through December in FY23.
SpiceJet Limited completed the spinoff of its cargo and logistics division "SpiceXpress" into a separate entity, SpiceXpress and Logistics Private Limited, the company said. "SpiceJet Limited has completed the hive off of its cargo and logistics division "SpiceXpress" into a more streamlined and efficient service to its customers.
SpiceXpress announced that it would release the consideration for the slump-sale by issuing equity shares and compulsorily convertible debentures to SpiceJet for a total of Rs. 2,555.77 crore. This move would also help SpiceJet's balance sheet.
Singh claims that SpiceXpress "would provide the cargo and logistics industry a deeper and differentiated focus and will allow the potential of obtaining financing for the firm to accelerate its expansion." "SpiceJet and SpiceXpress both have huge potential and will work well together," he said.
He added that the hive-off will drastically lower SpiceJet's negative net worth in addition to enabling SpiceXpress to earn money on its own. The hive-off would further strengthen and deleverage our balance sheet, according to Singh, who said that last month they restructured more than USD 100 million in outstanding debt to Carlyle Aviation Partner.
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