SpiceJet shares rally 8% as airline operator settles dispute with 3 lessors; key details

Shares of SpiceJet Ltd climbed 8 per cent in Wednesday's trade after the airline said its has achieved amicable settlement of its dispute with three of its the lessors. The dispute, valued in aggregate at $131.85 million or Rs 1,107 crore has been resolved for $22.5 million, SpiceJet said.

The settlement represents one of the largest financial agreements reached by SpiceJet, marking a step towards strengthening the airline’s balance sheet and reducing its overall liabilities, the company said in a BSE filing.

Following the development, the airline operator surged 8.24 per cent to hit a high of Rs 67.98 on BSE. The stock is up 92.14 per cent in the past one year.

"By resolving this major dispute, SpiceJet has cleared a significant hurdle, paving the way for improved financial stability and operational efficiency," SpiceJet said.

This settlement with Horizon Aviation 1, Horizon II Aviation 3 and Horizon III Aviation 2, which are the lessors under the management of Babcock & Brown Aircraft Management (BBAM), comes on the heels of SpiceJet’s successful resolution of a dispute with Engine Lease Finance Corporation (ELFC) on September 24, which had claimed $16.7 million.

SpiceJet Chairman and Managing Director Ajay Singh said the settlement with BBAM allows his company to significantly reduce liabilities and reinforces its efforts to emerge as a more robust airline.

"Together with the funds raised through our QIP, we are well-positioned to focus on growth, ungrounding our fleet, and expanding our services,” Singh said.

This settlement follows SpiceJet’s successful qualified institutional placement (QIP) that concluded on September 20, which raised Rs 3,000 crore. The QIP garnered overwhelming interest from a diverse group of top-tier institutional investors and funds, Singh said.

With a strengthened financial position and a growing fleet, SpiceJet is poised to restore its reputation for efficiency, reliability, and customer satisfaction, Singh added.

"The airline aims to provide passengers with improved connectivity, a wider range of travel options, and a seamless flying experience," the Spicejet MD said.