by Staff Correspondent
IADB: SpiceJet, 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 (“SpiceXpress”) subject to the approval of shareholders and such other approvals as may be required.
As per their 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 INR 30 crore. The revenue increased by a whopping 285% to INR 473 crore for the reported quarter as compared to INR 166 crore 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 INR 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. It is expected that SpiceXpress will operate as a separate entity upon transfer of business on or around October 1, 2021.
Mr. 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.”
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.