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HomeMarket NewsSpiceJet creditor takes airline shares at 78% premium as part of settlement
Under a new agreement, SpiceJet will pay Genesis $6 million and Genesis will acquire $4 million in SpiceJet equity at a price of ₹100 per share, which is 78% higher than the previous closing price.
By CNBCTV18.com December 19, 2024, 11:56:56 AM IST (Published)
SpiceJet has reached a settlement with lessor Genesis to resolve a $16 million dispute, the airline said in a statement on December 19. Under the agreement, SpiceJet will pay Genesis $6 million and Genesis will acquire $4 million in SpiceJet equity at a price of ₹100 per share, which is 78% higher than the previous closing price.
Following the announcement, SpiceJet shares traded 5% higher at ₹59 on BSE at 11:26 am.
Ajay Singh, Chairman and Managing Director, SpiceJet, said, “This agreement, which includes Genesis acquiring an equity stake in SpiceJet, will significantly reduce our financial liabilities and further strengthen our balance sheet.”
Prior to these, SpiceJet has already settled with several other lessors, including Horizon Aviation, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP, Shannon Engine Support Limited, and Export Development Canada.
These developments come after SpiceJet raised ₹3,000 crore through a Qualified Institutional Placement (QIP) and has since been clearing claims.
So far, the airline has cleared all pending statutory liabilities, including tax deducted at source (TDS), goods and services tax (GST), and employee salary dues. It said it utilised internal cash flows to meet its statutory obligations, including PF and TDS payments.
In its latest statement, the airline also pointed out that Carlyle Aviation agreed to convert $30 million of lease arrears into SpiceJet equity at ₹100 per share in September 2024, which it says signals increasing confidence from stakeholders in financial and operational recovery.
It also said that Acuité Ratings & Research Limited has recognised its progress and upgraded the credit rating on the airline by four notches.
However, earlier this week, the Delhi High Court issued summons to the CEO and COO and also now expressed “shock” at SpiceJet removing parts from planes that were returned to the lessor. The HC on December 17 heard a contempt plea filed by lessors TWC Aviation that claims while engines and planes were returned by the airline, several parts were removed from the airframes.
