SpiceJet announces landmark deal with EDC to clear $90m debts
The liabilities originate from a loan secured by the airline in 2011 for the acquisition of 15 aircraft.
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Mumbai: SpiceJet announced today that it has finalized an agreement with Export Development Canada (EDC) to resolve liabilities totaling $90.8 million (Rs 755 crore).
The liabilities originate from a loan secured by the airline in 2011 for the acquisition of 15 aircraft. According to SpiceJet's statement, the terms of the settlement agreement will enable the airline to clear significant liabilities, leading to a comprehensive restructuring of the airline's balance sheet. As per the terms, SpiceJet will gain complete ownership of 13 EDC-financed Q400 aircraft, enhancing the airline's operational capabilities and fleet management.
SpiceJet will make a comprehensive payment to settle outstanding liabilities amounting to nearly $91 million. This settlement is anticipated to generate savings of $68.3 million (Rs 567 crore) for SpiceJet.
Ajay Singh, Chairman and Managing Director of SpiceJet, commented, "We have finalized this settlement agreement with EDC. This important milestone will empower us to reinforce our balance sheet." With twelve of the Q400s currently not in operation, their refurbishment and subsequent return to service will enable SpiceJet to swiftly launch flights on various regional and UDAN routes, the airline stated. Additionally, the agreement is expected to bring long-term savings for SpiceJet, freeing the airline from the commitment of regular monthly rentals for these aircraft.
