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SpiceJet, a prominent Indian airline, has announced a significant development that has positively impacted its financial standing and stock performance. The airline has successfully resolved a dispute with three of its lessors, Horizon Aviation 1, Horizon II Aviation 3, and Horizon III Aviation 2, which are managed by Babcock & Brown Aircraft Management (BBAM). The dispute, valued at $131.85 million, or Rs 1,107 crore, was settled for a considerably lower amount of $22.5 million, representing a major win for SpiceJet.
This settlement follows a similar resolution reached by SpiceJet on September 24, where a dispute with Engine Lease Finance Corporation (ELFC) was settled for $16.7 million. These successful resolutions demonstrate the airline's commitment to resolving outstanding financial obligations and improving its overall financial health. As a result of these settlements, SpiceJet's balance sheet is expected to strengthen, and its overall liabilities will be reduced, ultimately leading to improved operational efficiency and financial stability.
The positive news was swiftly reflected in the stock market, where SpiceJet shares surged by 8.24 per cent to reach a high of Rs 67.98 on the Bombay Stock Exchange (BSE). This significant increase in stock value further highlights the positive impact of the dispute resolution on investor confidence. Furthermore, the company's stock has experienced a remarkable 92.14 per cent growth in the past year, indicating an overall positive trend in its financial performance.
The settlement with BBAM and the successful completion of the qualified institutional placement (QIP) on September 20, which raised Rs 3,000 crore, have placed SpiceJet in a strong position for future growth. The company plans to focus on expanding its fleet, ungrounding existing aircraft, and enhancing its services to provide passengers with a seamless travel experience. With a strengthened financial position and a growing fleet, SpiceJet aims to reestablish its reputation for efficiency, reliability, and customer satisfaction.
Source: SpiceJet shares rally 8% as airline operator settles dispute with 3 lessors; key details