SpiceJet completes the hive off, SpiceXpress now handles cargo and logistics

By siliconindia  |  Monday, 03 April 2023, 11:54:56 AM IST

SpiceJet completes the hive off, SpiceXpress now handles cargo and logistics
SpiceJet Ltd stated that it had hived off its cargo and logistics business SpiceXpress into a separate entity SpiceXpress and Logistics Pvt Ltd, from April. The move results in a one-time gain of Rs 2,555.77 crore for SpiceJet, considerably reducing its negative net worth, the company said.
It also opens the door for SpiceXpress to raise funds independently, SpiceJet said. The decision to hive off SpiceXpress is in sync with company's long term business plan and will open up significant valuation of the logistic business, SpiceJet Ltd Chairman Ajay Singh said.
Singh further said "the separation of our cargo and logistics arm is a stepping stone in our company's growth which shall unfold in the times to come". SpiceXpress reported a net profit of Rs 51.4 crore for the April-December period of FY23.
"In a bid to boost the growth of its cargo business and provide a more efficient and 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 company said.
The consideration for the slump-sale will be released by SpiceXpress by issuance of securities in the combination of equity shares and compulsorily convertible debentures to SpiceJet for an aggregate value of Rs 2,555.77 crore which will also strengthen the balance sheet of SpiceJet, it said.
According to Singh, "SpiceXpress will provide greater and distinguished focus to cargo and logistics business and will allow the possibility of raising capital for the business to accelerate its growth". Both SpiceJet and SpiceXpress have immense potential and will complement each other well, he added.
He said that the hive off will not only enable SpiceXpress to raise cash independently, it will substantially decrease SpiceJet's negative net worth. "Having restructured over USD 100 million, outstanding dues to Carlyle Aviation Partner last month, the hive off will further strengthen and deleverage our balance sheet," Singh said

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