Himalaya Harbinger, Rudrapur Bureau
Budget airline SpiceJet’s shares rose on September 27 after it said it has cleared all GST dues of around Rs 71 crore, days after raising Rs 3,000 crore through Qualified Institutional Placement (QIP).
“SpiceJet has cleared all its Goods and Services Tax (GST) dues, demonstrating its commitment to maintaining financial discipline and regulatory compliance,” said the airline in a statement.
We are proud to have cleared all GST dues, a significant step towards reinforcing our commitment to financial discipline and regulatory compliance,” said Ajay Singh, Chairman & Managing Director of SpiceJet. “These developments reflect our commitment to providing exceptional service to our passengers while positioning ourselves strategically for the future.”
On September 24, SpiceJet announced it had resolved its dispute with Engine Lease Finance Corporation (ELFC) through an amicable settlement. ELFC had previously claimed $16.7 million, and the settlement has been reached for an undisclosed amount, which is lower than the initial claim. This resolution marks another significant step towards strengthening SpiceJet’s financial health.
The QIP, which opened on September 16 and closed on September 18, received an overwhelming response from qualified investors and got significantly oversubscribed, demonstrating strong confidence in the company’s growth prospects, SpiceJet said in a statement earlier this month.
It also said the QIP attracted a diverse pool of top-tier institutional investors and mutual funds, including Goldman Sachs (Singapore), Morgan Stanley Asia, BNP Paribas Financial Markets ODI, Nomura Singapore Ltd ODI, Tata Mutual Fund, Discovery Global Opportunity Ltd, among others.
The newly raised capital will be used to operationalise grounded aircraft, acquire new planes, invest in technology, and expand into new markets, the airline said.
Earlier this month, SpiceJet revealed that it did not pay statutory dues amounting to nearly Rs 427 crore between April 2020 and August 2024 due to its “constrained financial position”. The unpaid dues include Rs 219.8 crore in tax deducted at source (TDS), Rs 71.33 crore in goods and services tax (GST), and Rs 135.47 crore towards provident fund (PF) contribution.
The cash-strapped airline also disclosed that 36 of its 58 aircraft are grounded, “primarily” due to “alleged default” in payments to aircraft lessors, financial difficulties affecting aircraft maintenance, and the unavailability of components and spare parts.
In addition to the statutory dues, SpiceJet said it owed Rs 118.9 crore to its employees as on September 15, 2024, which it plans to clear using funds from the QIP. The airline’s airport dues stood at Rs 290 crore as on September 15, of which Rs 150.3 crore shall be settled from the money raised. It also intends to allocate Rs 370 crore to expand its fleet.
