SpiceJet settles Rs 755 crore liabilities of lessor

economictimes.indiatimes.com:

SpiceJet on Tuesday said it has agreed to a pact with Export Development Canada (EDC) to settle liabilities worth Rs 755 crore. The settlement will generate savings to the tune of Rs 567 crore, the airline said in a statement.

As part of the agreement, SpiceJet will also acquire ownership of 13 EDC-financed Q400 aircraft. Twelve out of these 13 aircraft were grounded as the airline had failed to pay lease rentals to the lessor. SpiceJet chairman Ajay Singh said the settlement will allow the airline to strengthen its balance sheet.
«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.

Multiple lessors and vendors of the airline have moved court and some have even filed insolvency cases against the airline due to a default on payment despite multiple warnings.
As part of settling the disputes, the airline had reached out to multiple lessors to recast their debt into equity in the airline. However, till now, only Carlyle Aviation Partners, which had the highest exposure to the airline, has agreed to acquire a 5.91% stake against the lease arrears.