On Monday, the SpiceJet board requested shareholder approval to issue securities to qualified institutional purchasers in order to raise new capital of up to $301.9 million (Rs 2,500 crore). The company’s effort to borrow money comes as its cash reserves are running low, a new competitor named Akasa Air is vying for market share, and rival Air India is stepping up its refurbishment plans with sizable purchases for brand-new aircraft. SpiceJet’s stock increased by as much as 6.4% on the announcement.

On Monday, the low-cost airline said that it had converted nearly $100 million in unpaid debt to the aircraft leasing company Carlyle Aviation Partners into equity shares and compulsorily convertible debentures (CCDs). An alternative investment company that specialises on exposures to commercial airlines is called Carlyle Aviation. It presently owns three B737-900(ER)s and at least seven B737-800s leased to SpiceJet. It was formerly known as Apollo Aviation Group and changed its name to Carlyle Aviation Partners after being acquired by private equity behemoth Carlyle Group in 2018. SpiceJet’s board of directors has authorised issuing Carlyle Aviation with new equity shares worth $29.5 million (Rs 244.28 crore) at Rs 48 per share or the Sebi-determined price, which ever is higher.

As of right now, SpiceJet Ltd. will own more than 7.5% of Carlyle Aviation Partners. Also, the airline will transfer to Carlyle Aviation compulsorily converted debentures of SpiceXpress & Logistics valued at $65.5 million. At a later time, Carlyle will exchange the debentures of SpiceXpress, a different airline cargo company owned by SpiceJet, for shares of the cargo company. At a future expected valuation of $1.5 billion, the CCDs will be converted into equity shares of SpiceXpress.