SpiceJet settles Rs 755 crore liabilities with lessor EDC
NEW DELHI: SpiceJet has signed an agreement with aircraft lessor Export Development Canada (EDC) to settle liabilities worth Rs 755 crore and acquire the full ownership of thirteen EDC-financed Q400 aircraft. The airline said on Tuesday that the agreement will allow them to clear major liabilities, leading to a comprehensive revitalization of its balance sheet.
The settlement with EDC will enable the airline to save Rs 567 crore, SpiceJet added. The airline, which is raising Rs 2,250 crore via preferential issue of shares and warrants from investor, is on a settlement spree. In recent times, it has settled liabilities with aircraft lessors such as Echelon Ireland Madison One, Cross Ocean Partners and Celestial aviation. SpiceJet settled dispute worth Rs 413 crore with Echelon Ireland Madison One and Rs 93 crore dispute with Cross Ocean Partners. Last month it settled Rs 250 crore dispute with Celestial Aviation.
Ajay Singh, Chairman and MD of SpiceJet, said, “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 milestone will allow us to strengthen our balance sheet and position the airline for long-term success.”
The liabilities with EDC stem from a loan acquired by the airline in 2011 for procurement of 15 aircraft. With twelve of these Q400s currently grounded, their refurbishment and subsequent return to service will enable SpiceJet to launch flights on numerous regional and UDAN routes, the airline said.