SpiceJet lost Rs 998 crore in FY21; to raise Rs 2,500 crore via QIP & hive off cargo arm – Times of India
NEW DELHI: Ajay Singh-promoted SpiceJet will raise Rs 2,500 crore through QIP and hive off its cargo business as a separate entity.
The budget airline on Wednesday reported a Q4 FY 21 loss of Rs 235 crore, down from a loss of Rs 807 crore in same period in previous fiscal.
In Covid-stricken financial year, the airline has lost Rs 998 crore, down from a loss of R 935 crore in FY 20. Its scrip closed 1.5% lower at Rs 81 on BSE Wednesday.
However, the airline's auditor in its report with the result says the loss for Q4 FY21 and fiscal year 2020-21 would have been higher by Rs 142 crore and Rs 533.4 crore, respectively, had it not recognised certain items like compensation from Boeing for the grounded B737 Max as there is no “virtual certainty” of getting the same.
Auditor Walker Chandiok & Co says: “The company's accumulated losses have resulted in complete erosion of its net worth and the current liabilities have exceeded its current assets by Rs 5,185.8 crore as at March 31, 2021. (There is) existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern.”
SpiceJet CMD Ajay Singh said: “The intensity with which the second wave of Covid-19 struck and the unimaginable devastation it has caused, both for the already battered travel industry and generally, will take time to heal. To ensure our long term growth and sustainable operation we have decided to raise funds of up to Rs 2,500 crore. These funds will be used to significantly strengthen our balance sheet.”
“Much like the first wave, this time too, our cargo arm was exceptionally active and has performed extremely well transporting record quantities of supplies all across the globe. In order to provide greater focus to cargo business and raise additional capital, we will hive-off the cargo business to operate as a separate entity. The same will provide greater opportunity and flexibility in pursuing long term growth plan and strategies for the cargo business,” Singh added.
The budget airline on Wednesday reported a Q4 FY 21 loss of Rs 235 crore, down from a loss of Rs 807 crore in same period in previous fiscal.
In Covid-stricken financial year, the airline has lost Rs 998 crore, down from a loss of R 935 crore in FY 20. Its scrip closed 1.5% lower at Rs 81 on BSE Wednesday.
However, the airline's auditor in its report with the result says the loss for Q4 FY21 and fiscal year 2020-21 would have been higher by Rs 142 crore and Rs 533.4 crore, respectively, had it not recognised certain items like compensation from Boeing for the grounded B737 Max as there is no “virtual certainty” of getting the same.
Auditor Walker Chandiok & Co says: “The company's accumulated losses have resulted in complete erosion of its net worth and the current liabilities have exceeded its current assets by Rs 5,185.8 crore as at March 31, 2021. (There is) existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern.”
SpiceJet CMD Ajay Singh said: “The intensity with which the second wave of Covid-19 struck and the unimaginable devastation it has caused, both for the already battered travel industry and generally, will take time to heal. To ensure our long term growth and sustainable operation we have decided to raise funds of up to Rs 2,500 crore. These funds will be used to significantly strengthen our balance sheet.”
“Much like the first wave, this time too, our cargo arm was exceptionally active and has performed extremely well transporting record quantities of supplies all across the globe. In order to provide greater focus to cargo business and raise additional capital, we will hive-off the cargo business to operate as a separate entity. The same will provide greater opportunity and flexibility in pursuing long term growth plan and strategies for the cargo business,” Singh added.
