SpiceJet’s shares increased 3% intraday on April 3 after the company demerged its trucking and logistics business into a separate business entity, SpiceXpress and Logistics Private Limited.

“The demerger, designed to facilitate the growth of its cargo business, will take effect on April 1, 2023, and paves the way for SpiceXpress to raise capital independently,” the low-cost carrier said in a bourse filing.

The demerger will also strengthen SpiceJet’s balance sheet and remove a significant portion of the airline’s debt, as it will bring in one-off benefits worth Rs 2,555.77 crore.

Shares of SpiceJet were trading at Rs 30.95 on the National Stock Exchange at 12:36 pm, up 2.31% from Friday’s close.

“The decision to demerge SpiceXpress is in line with our long-term business plan and will unlock significant valuation in logistics. The demerger will further strengthen and de-segregate following last month’s restructuring of more than $100 million owed by Carlyle’s partners,” SpiceJet chairman and managing director Ajay Singh said in a filing to the exchange.

In February, Carlyle Aviation Partners agreed to convert its outstanding lease payments on SpiceJet into a 5% stake in the airline. The Carlyle Group company has the biggest exposure among lessors. After the conversion, Carlyle Aviation Partners will own a 7.5% stake in the airline.