SpiceJet to transfer logistics business to SpiceXpress
Logistics business is valued at over Rs 2,555 crore, spread over 68 domestic and 110 international destinations including the US, Europe and Africa
Hyderabad: SpiceJet 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 subject to approvals.
As per the last quarterly segment reporting by the company ended June 30, 2021, the logistics arm reported a net profit of Rs 30 crore. The revenue increased by 285 per cent to Rs 473 crore for the reported quarter as compared to Rs 166 crore in the same quarter last year.
The logistics arm 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 Rs 2,555.77 crore based on an independent valuation exercise carried out by the company and the purchase consideration for the same will 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. SpiceJet will continue to provide certain transportation services, ground and logistics support, management services, sharing and provisioning of resources etc. to SpiceXpress.
Ajay Singh, CMD, 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.”
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