SpiceJet to transfer logistics business to SpiceXpress; Stock ends 4.5% higher

Logistics business valued at Rs2,555.77cr.

Aug 17, 2021 05:08 IST India Infoline News Service

SpiceJet, India’s favourite airline and the leading logistics platform, has announced the transferring of its cargo and logistics services on a slump sale basis along with all related assets and liabilities, including, know-how, trademark, licenses, franchises, customer contracts, distribution network etc. to its subsidiary SpiceXpress and Logistics Pvt. Limited.

As per the last quarterly segment reporting by the Company ended June 30, 2021, the logistics arm continued with its strong growth story reporting yet another profitable quarter with a Net Profit of Rs30cr.

The revenue increased by a whopping 285% to Rs473cr for the reported quarter as compared to Rs166cr in the same quarter last year. The logistics arm today has a network which spans over 68 domestic and over 110 international destinations including US, Europe and Africa.

The logistics business has been valued at Rs2,555.77cr based on an independent valuation exercise carried out by the Company and the purchase consideration for the same shall be discharged by SpiceXpress by issuance of shares of SpiceXpress to SpiceJet, subject to all approvals as may be required. It is expected that SpiceXpress will operate as a separate entity upon transfer of business on or around October 1, 2021.

While SpiceXpress will operate as a separate entity, SpiceJet will continue to provide certain transportation services, ground and logistics support, management services, sharing and provisioning of resources etc. to SpiceXpress.

Ajay Singh, Chairman and Managing Director, SpiceJet, said “The proposed transfer of business to SpiceXpress will allow the new company to rapidly grow its innovative logistics platform and its unique fulfilment as a service business model. SpiceXpress will also be able to raise capital independent of SpiceJet to fund this growth.

We are confident that the performance of SpiceXpress as an independent entity will leverage and unlock significant value for SpiceJet and all its shareholders.”

SpiceJet ended at Rs71.90 apiece up by Rs3.2 or 4.66% on Sensex.

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