The SpiceJet board on Monday sought shareholder approval to raise fresh capital of up to $301.9 million (Rs 2,500 crore) by issuing securities to qualified institutional buyers.

The company’s plan to raise capital comes as its cash reserves dwindle and new entrant Akasa Air jostles for a share of the market, while rival Air India ramps up its revamp plans with mammoth orders for new aircraft.

Shares of SpiceJet jumped as much as 6.4 per cent on the announcement.

The budget carrier on Monday said it has restructured over $100 million outstanding dues to aircraft leasing firm Carlyle Aviation Partners into equity shares and compulsorily convertible debentures (CCDs).

Carlyle Aviation is an alternative investment firm specialising in exposures to commercial airlines. It has at least seven B737-800s and three B737-900(ER)s currently placed in lease with SpiceJet.

It was earlier known as Apollo Aviation Group and was acquired by private equity giant Carlyle Group in 2018 and was renamed Carlyle Aviation Partners.

The board of directors of cash-strapped SpiceJet has approved issuing fresh equity shares of $29.5 million (Rs 244.28 crore) to Carlyle Aviation at Rs 48 per share or the Sebi determined price, whichever is higher.

Carlyle Aviation Partners will now have over 7.5 per cent equity stake in SpiceJet Ltd.

The airline will also transfer $65.5 million worth of compulsorily converted debentures of SpiceXpress and Logistics to Carlyle Aviation.

Carlyle will convert the debentures of SpiceXpress, a separate airline cargo company owned by SpiceJet, into shares of the cargo business at a later date. The CCDs will be converted into equity shares of SpiceXpress at an anticipated future valuation of $1.5 billion.

With input from Reuters