Dentons Link Legal acted for troubled and cash-strapped Indian airline SpiceJet on its $358 million financial infusion through a qualified institutional placement of equity shares. Crawford Bayley & Co and Dentons U.S. acted as domestic and international counsel respectively to the book-running lead managers, DAM Capital Advisors and JM Financial.
The QIP was oversubscribed in the domestic and international markets with marquee investors including Goldman Sachs, Morgan Stanley, Nomura Singapore and Societe Generale, subscribing despite the airline’s turbulent finances over the last few years.
Experts say this indicates investors' resilient belief in SpiceJet’s recovery and underlying faith in India’s growing aviation industry.
The Dentons Link Legal team advising SpiceJet was led by partners Milind Jha and Shailender Sharma and included senior associates Aashna Batra and Tamilarasi A Mudaliar, and associates Diksha Chawla and Kumar Aditya.
India’s airline market is currently a duopoly where Tata and Indigo control close to 80 percent of the market. The domestic airline sector is the third largest globally, experiencing a 15 percent year-on-year growth in the last few years.
Despite this growth, SpiceJet’s market share has shrunk to 2.3 percent this year, with increasing financial troubles including defaults on rental payments leading to insolvency proceedings, reduction in operating fleet size and rising debt, effectively disabling it from raising funds.
With this QIP, the airline with re-organize its financial health, unground planes, and gain its lost footing in the market.
The airline will also receive an additional $88 million from a previous funding round, to further revitalise its financial stability and growth plans.
