Low-Cost Carrier (LCC) SpiceJet has announced the completion of the transfer of its cargo and logistics division ‘SpiceXpress’ into a separate entity, SpiceXpress and Logistics Private Limited.
Ajay Singh, Chairman & Managing Director, SpiceJet, said, “The separation of our cargo and logistics arm is a stepping stone in our growth story which shall unfold in the times to come.”
The decision to hive off SpiceXpress is in sync with our long-term business plan and will unlock significant valuation of the logistic business. Both SpiceJet and SpiceXpress have great potential and will complement each other well, he added.
SpiceXpress, which reported a net profit of INR 51.4 crore in the first three quarters of FY23, will now be able to raise funds independently.
“The hive off would strengthen SpiceJet’s balance sheet, wipe out a substantial portion of the company’s negative net worth and unlock significant value for the company and its shareholders,” SpiceJet announced in a release, adding that it would result in a one-time gain of INR 2,555.77 crore for the LCC, substantially reducing its negative net worth.
“The hive-off will not only enable SpiceXpress to raise cash independently; it will significantly reduce SpiceJet’s negative net worth. Having restructured over $100 million, outstanding dues to Carlyle Aviation Partner last month, the hive-off will further strengthen and deleverage our balance sheet,” Singh added.
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