SpiceJet Settles Dispute With Engine Lease Finance Corporation For Undisclosed Amount
Low-cost carrier SpiceJet Ltd. has announced an amicable settlement with Engine Lease Finance Corporation (ELFC), resolving a $16.7 million (approx. Rs 140 crore) dispute for an undisclosed amount, lower than the original claim. The settlement, disclosed in a press release on Sept. 24, will formalise the agreement and lead to the withdrawal of all ongoing litigation.
“We are pleased to have reached a mutually beneficial settlement with ELFC, which enables us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on the next phase of growth and expansion,” said Ajay Singh, Chairman and Managing Director of SpiceJet.
The settlement follows SpiceJet's successful Rs 3,000 crore fundraise through a Qualified Institutional Placement (QIP). Key investors in the QIP included Societe Generale - ODI, Goldman Sachs (Singapore) Pte - ODI, Nomura Singapore Ltd ODI, and Discovery Global Opportunity (Mauritius).
According to SpiceJet's corporate presentation for September 2024, the airline's total debt stands at Rs 4,300 crore, with Rs 3,700 crore owed to lessors and engineering creditors. SpiceJet recently announced a financial restructuring plan with Carlyle Aviation, which would reduce its net debt by Rs 336 crore. The restructuring covers lease obligations of $137.68 million (Rs 1,157 crore), to be adjusted down to $97.51 million (Rs 820 crore) upon settlement.
Amid ongoing financial challenges and the global grounding of Boeing 737 MAX aircraft, SpiceJet's fleet has shrunk from 74 aircraft in 2019 to 28 in 2024.
NDTV Profit reported on Sept. 18 that the airline's statutory dues since 2010 have risen to Rs 794 crore, including Rs 135.5 crore in unpaid Provident Fund contributions.
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