SpiceJet inks deal with Export Development Canada to settle liabilities worth $90 million

SpiceJet on Tuesday said it has signed a pact with Export Development Canada (EDC) to settle liabilities worth USD 90.8 million (Rs 755 crore).

The liabilities stem from a loan acquired by the airline in 2011 for the procurement of 15 aircraft.

The terms of the settlement pact will allow the airline to clear major liabilities, leading to a comprehensive revitalisation of the airline's balance sheet, SpiceJet said in a statement.

Under the agreement, SpiceJet will acquire full ownership of 13 EDC-financed Q400 aircraft, bolstering the airline's operational capabilities and fleet management, it said.

SpiceJet will pay a comprehensive settlement amount to resolve outstanding liabilities amounting to close to USD 91 million, the airline said.

This settlement will lead to savings worth USD 68.3 million (RS 567 crore) for SpiceJet, it said.

"We have reached this settlement agreement with EDC. This significant milestone will allow us to strengthen our balance sheet," said Ajay Singh, Chairman and Managing Director of SpiceJet.

With twelve of these Q400s currently grounded, their refurbishment and subsequent return to service will enable SpiceJet to promptly launch flights on numerous regional and UDAN routes, the airline said.

It also said that the agreement will result in long-term savings for SpiceJet, liberating the airline from the obligation of regular monthly rentals for these aircraft, it added.