 "SpiceJet")
SpiceJet on Tuesday announced it was transferring its cargo and logistics services on a slump sale basis to its subsidiary SpiceXpress and Logistics Private Limited.
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," said Ajay Singh, Chairman and Managing Director, SpiceJet, in a statement.
SpiceXpress will also be able to raise capital independent of SpiceJet to fund this growth, he mentioned.
He said he was confident that the performance of SpiceXpress as an independent entity will leverage and unlock significant value for SpiceJet and all its shareholders.
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."
It is expected that SpiceXpress will operate as a separate entity upon transfer of business on or around October 1, 2021, it mentioned.
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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, it said.
SpiceJet said all related assets and liabilities, including, know-how, trademark, licenses, franchises, customer contracts and distribution network of cargo and logistics business would be transferred to SpiceXpress.
As per the quarterly results for period ending June, the logistics arm continued with its strong growth story reporting yet another profitable quarter with a net profit of Rs 30 crore.
"The revenue increased by a whopping 285 per cent to Rs 473 crore for the reported quarter as compared to Rs 166 crore in the same quarter last year," the airline's statement noted.
The logistics arm has a network which spans over 68 domestic and over 110 international destinations including the US, Europe and Africa, it mentioned.
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