In focus: SpiceJet trading rangebound for more than five months
Fresh equity infusion might be a comeback story.
Things haven’t been going right for India’s one of the largest passenger and cargo airlines SpiceJet. The company has been hitting the news not for its rewards but for the worries of its shareholders. From the 52-week high of Rs 107.95 which was created in December 2020, the stock price has been tumbling down since then. It has been trading rangebound from Rs 65 to Rs 75 for the last five to six months.
The company made an announcement today regarding the settlement agreement that it has entered with the US plane-maker Boeing. The US giant has agreed to provide certain accommodations and settle the outstanding claims related to the grounding of the 737 MAX aircraft and its return to service. The company is the biggest customer for the MAX aircraft in the Southeast Asian region for Boeing. The regulatory filing said, “This paves the way for the induction of efficient and younger MAX aircraft into the Company’s fleet and ensures the resumption of new aircraft deliveries from our order of 155 MAX aircraft.”
Even so, the stock was down today by about 0.7% and was trading near the level of Rs 77.55.
A couple of months back it had announced its agreement with CDB Aviation, another lessor of MAX aircraft and the company expected to start operations of MAX aircraft around the end of September 2021. The quarterly results were disappointing for many as the company reported net losses of Rs 570 crore. In the previous quarter, it had accumulated net losses of Rs 731 crore.
However, things may not seem as gloomy as they might appear. The company is planning for equity infusion by raising fresh capital of up to Rs 2500 crore through eligible securities to qualified institutional buyers (QIB).
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