The arrangement represents the “biggest breakthrough in SpiceJet’s financial restructuring efforts,” according to the airline.
The airline would save a total of Rs 567 crore as a result of the settlement. SpiceJet’s shares were trading 3.5 percent higher at Rs 61 apiece on the BSE at 13:15 on March 26.
As per the agreement, SpiceJet will now acquire full ownership of 13 EDC-financed Q400 aircraft.
“Under the agreement’s terms, SpiceJet will acquire full ownership of 13 EDC-financed Q400 aircraft, bolstering the airline’s operational capabilities and fleet management. “
“This pivotal agreement marks a significant milestone in SpiceJet’s pursuit of financial stability, demonstrating its commitment to prudent financial management and long-term prosperity.”
Spicejet
As part of the settlement, SpiceJet will pay a comprehensive settlement amount to resolve outstanding liabilities amounting to close to Rs 755 crore as per SpiceJet books of accounts. “This settlement not only alleviates SpiceJet of a substantial financial burden but also lays the groundwork for a fortified balance sheet and substantial savings for the airline,” said the airline.
“We are pleased to have reached this settlement agreement with EDC and we thank their leadership and management team for their cooperation, understanding and progressive approach through the process. This significant milestone will allow us to strengthen our balance sheet and position the airline for long-term success.”
Ajay Singh, Chairman and Managing Director of SpiceJet
The airline’s 2011 acquisition of a loan for the purchase of fifteen aircraft is the source of the liabilities. Twelve of these Q400s are now grounded, but SpiceJet stated that by refurbishing them and putting them back into service, it will be able to quickly start flights on a number of regional and UDAN destinations.
In order to repair its grounded fleet and resume full capacity, SpiceJet has achieved agreements with several lessors over the past few months, including Aercap, the largest aircraft lessor in the world.
The airline operated 39 aircraft as of March, the majority of which were Boeing 737s with a small number of Bombardier Q400s. The airline said that it would be able to start new flights on regional routes because it would own all of the Q400 aircraft.
Canada-based Bombardier is a manufacturer of jets.
