SpiceJet has announced that it will shift its cargo and logistics business to its cargo arm, SpiceXpress.

The India-based carrier noted that upon transfer of the said businesses to its subsidiary, SpiceXpress will operate as a separate entity beginning October 1 this year.

The said transfer includes “all related assets and liabilities, including, know-how, trademark, licenses, franchises, customer contracts, distribution network etc”.

“The logistics business has been valued at INR 2,555.77 crore based on an independent valuation exercise carried out by the company [SpiceJet] 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,” SpiceJet said.

Ajay Singh, chairman and managing director at SpiceJet said the planned 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. We are confident that the performance of SpiceXpress as an independent entity will leverage and unlock significant value for SpiceJet and all its shareholders,” Singh added.

SpiceXpress has been launching new services within India and beyond including connections to Bangkok.

SpiceXpress’ domestic network spans at least 63 domestic and 50 international destinations, and it has a fleet of 19 freighters.