SpiceJet share price rises over 5% on fundraising plans

SpiceJet share price rose over 5% on Thursday's session following the announcement that the airlines promoter Ajay Singh offered to infuse Rs.500 crore into the company to improve the airline's financial status. SpiceJet shares opened at Rs. 33 apiece on BSE.3.

In an exchange filing on Wednesday, the company stated that the board had discussed options for raising new capital for the company. In order to improve the company's financial position, promoter Ajay Singh offered to invest Rs.500 crore by way of subscription to equity shares and/or convertible securities/equity share warrants on a preferential basis, along with the company's promoter group in accordance with SEBI.

The board discussed the issue and decided to issue equity shares and/or convertible securities and/or equity share warrants to the company's promoter and/or the promoter group on a preferential basis in one or more tranches for an amount of Rs. 500 crore, subject to the approval of the company's shareholders.

Additionally, the company stated in an exchange filing that this fund raising will also be considered as an equity contribution by the Promoters of the Company under the Emergency Credit Line Guarantee Scheme (the "ECLG Scheme") of the Government of India, which will grant the firm additional credit facilities totalling Rs.206 crore under the ECLG Scheme.

The board further decided to seek approval of the shareholders in accordance with extant provisions of the Companies Act, 2013 and other applicable rules and regulations.

On the technical front, as per trendlyne data, the stock price fell 19.3% and underperformed its sector by 86.5% in the past year.