SpiceJet, a private airline, has come to an agreement with Export Development Canada (EDC) to resolve debts totaling Rs 755 crore, the company revealed in a filing to the stock exchange on Tuesday.
Under this settlement, SpiceJet stands to save Rs 567 crore. As per the terms, SpiceJet will take possession of 13 A400 aircraft financed by EDC. The airline had initially borrowed to acquire 15 Q400 aircraft in 2011, twelve of which are currently out of service. SpiceJet plans to refurbish these grounded aircraft, allowing it to quickly expand its services on various regional and UDAN routes.
In a statement, SpiceJet expressed that this agreement will help clear substantial debts, leading to a significant improvement in its financial position.
Following this news, SpiceJet's shares rose to Rs 60.7 per share, marking a 3.3 per cent increase as of 1:10 pm, despite the broader market indices experiencing a 0.25 per cent decline.
CMD Ajay Singh commented, "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."
SpiceJet has been actively resolving disputes with its lessors in an effort to improve its financial health. Recently, it settled a Rs 413 crore dispute with aircraft leasing firm Echelon Ireland Madison One. Additionally, the airline announced on March 5 that it had reached a settlement with Cross Ocean Partners, resolving a dispute worth about Rs 93 crore and acquiring an airframe and an engine as part of the deal. Prior to these settlements, SpiceJet had also resolved a Rs 250 crore dispute with Celestial Aviation on February 28.
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