SpiceJet resolves $132 million liability dispute by paying lessor just $22.5 million

In a major development for the aviation sector, budget carrier SpiceJet managed to clear a long-standing hurdle by successfully settling a major financial dispute. The airline paid $22.5 million to resolve a $132 million claim raised by its lessor Babcock & Brown Aircraft Management, representing a massive discount of over 83%.

This settlement forms a substantial part of SpiceJet's efforts to strengthen its balance sheet and reduce overall liabilities. By resolving this significant dispute, the company has cleared a long-pending obstacle and paves the way for improved stability. It comes on the back of an earlier settlement with another lessor Engine Lease Finance Corporation.

Investors welcomed the development, sending SpiceJet shares soaring over 8% intraday. Chairman and MD Ajay Singh stated this landmark agreement allows them to meaningfully lower liabilities and reinforce their mission to emerge as a more robust carrier. Together with funds raised via a recent share issue, the airline is well-positioned for growth by regrounding more planes and expanding operations.

The settlement provides a major shot in the arm for SpiceJet's recovery plans. It marks one of its largest financial pacts to date toward achieving fiscal strength and operational efficiency. With two major liability issues addressed in quick succession, the airline seems to be overcoming hurdles steadily in its journey toward sustainable long-term growth and value creation.