With hardly any cash left, SpiceJet should fuel up for the flight ahead
• SpiceJet needs to bolster its balance sheet with a fundraise sooner than later
• With low cash on its books, the airline is heavily dependent on variables outside its control to sustain
SpiceJet Ltd has denied a news report that it plans to raise ₹750 crore through a qualified institutional placement. The report in the Business Standard newspaper had said that the budget airline is talking to investors to cope with the liquidity crunch it is facing.
Whether or not the company has actually been talking to potential investors, the fact is that SpiceJet has extremely low amounts of cash on its books, and needs to bolster its balance sheet with a fundraise sooner than later.
As on 30 September, the airline had cash and cash equivalents worth ₹93 crore. What’s more it had a negative net worth of about ₹850 crore. For comparison, market leader InterGlobe Aviation Ltd had cash and cash equivalents worth about ₹18,736 crore and a net worth of about ₹6,200 crore at end of September.