NEW DELHI, Mar 26
As a part of financial restructuring efforts by SpiceJet, the domestic carrier has reached a settlement agreement with Export Development Canada (EDC) for its outstanding debt. The airline will pay close to $91 million (Rs 755 crore) to the Ottawa-based credit agency. Under the terms of the agreement, SpiceJet will acquire full ownership of 13 EDC-financed Q400 aircraft. This will bolster 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 said in its press release. Ajay Singh, Chairman and Managing Director 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 significant milestone will allow us to strengthen our balance sheet and position the airline for long-term success.”
The liabilities stem from a loan acquired in 2011 for the procurement of 15 aircraft. However, twelve out of 15 acquired Q400s are currently grounded. The deal will pay the way for transfer of ownership of 13 EDC-financed aircrafts to SpiceJet. “This agreement heralds immense long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft.” Reacting to the recent development, shares of SpiceJet are trading 3.25 points, or 5.53 per cent higher at 62.00 per equity share at 1:30 pm on NSE.
