SpiceJet said on Tuesday that its freight and logistics services would be transferred to its subsidiary SpiceXpress and Logistics Private Limited on a slump sale basis.
In a statement, SpiceJet Chairman and Managing Director Ajay Singh said, “The planned transfer of operations to SpiceXpress would allow the new firm to rapidly expand its revolutionary logistics platform and its unique fulfilment as a service business model.” He also said that SpiceXpress will be able to seek funds independently of SpiceJet in order to support this expansion.
He expressed confidence in SpiceXpress’s ability to leverage and unlock considerable value for SpiceJet and all of its shareholders as an independent business.
The airline’s statement said: “The logistics business has been valued at Rs 2,555.77 crore 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.”
SpiceXpress is planned to function as a distinct corporation once the business is transferred on or around October 1, 2021, according to the statement.
While SpiceXpress will operate independently, SpiceJet will continue to offer transportation, ground and logistical support, management services, resource sharing and provisioning, and other services to SpiceXpress, according to the company.
SpiceJet said it will transfer all relevant assets and liabilities to SpiceXpress, including know-how, trademarks, licences, franchises, customer contracts, and the cargo and logistics distribution network.
According to the quarterly statistics for the period ended June, the logistics arm continued its excellent growth narrative, earning a net profit of Rs 30 crore for the quarter.
“Revenue grew by a staggering 285% to Rs 473 crore for the reporting quarter as opposed to Rs 166 crore in the same quarter previous year,” the airline said in a statement.
It stated that the logistics arm has a network that covers over 68 domestic and 110 foreign locations, including the United States, Europe, and Africa.
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