SpiceJet’s stock rose 6 per cent after the firm announced that its Board of directors had accepted a proposal to transfer cargo business to a subsidiary on a slump sale basis, as well as raise new capital through qualified institutional placement (QIP).

The Board will seek approval from company members for the fundraise.

“The Board has proposed to seek to enable approval of members of the company (which will be valid for 365 days from the date of passing of the resolution) for raising fresh capital of upto Rs 2,500 Crore through the issue of eligible securities to qualified institutional buyers,” said SpiceJet.

Also, the company’s Board of directors has approved a Rs 2,556 crore slump sale of its freight business to SpiceXpress and Logistics Pvt Ltd (SXPL).

“The consideration for said transfer of cargo business undertaking shall be discharged by SXPL by the issuance of securities in the combination of equity shares and compulsorily convertible debentures (CCDs) to the company for an aggregate amount of Rs 2,555 crore,” said the company.

All of these CCDs will be transferred to aircraft lessors who agree to swap their lease liabilities for an amount equal to the total nominal value of such CCDs as part of the ongoing restructuring with Carlyle and others.

The Board of directors also approved a debt-for-equity swap with aircraft lessor Carlyle Aviation. Carlyle Aviation, which is controlled by global private equity firm Carlyle Group, has the most exposure among other lessors, with around 14 Boeing 737 aircraft.