SpiceJet shares flew more than 8% to an intra-day high of Rs 67.98 after the aviation company settled a $132 million dispute with lessor Babcock & Brown Aircraft Management (BBAM) by paying $22.5 million.

The airline settled the dispute with its lessors Horizon Aviation 1, Horizon II Aviation 3, and Horizon III Aviation 2. All three are managed by Babcock & Brown Aircraft Management. SpiceJet resolved the dispute for $22.5 million, which was valued at $131.85 million, said the company in a media release. 

“This settlement represents one of the largest financial agreements reached by SpiceJet, marking a substantial step towards strengthening the airline’s balance sheet and reducing its overall liabilities. By resolving this major dispute, SpiceJet has cleared a significant hurdle, paving the way for improved financial stability and operational efficiency,” said the company.  

The settlement with BBAM is the second dispute it resolved with its lessors within a month. The company earlier settled a dispute of $16.7 million with Engine Lease Finance Corporation (ELFC). SpiceJet settled the case for an undisclosed amount. 

“This landmark settlement with BBAM allows us to significantly reduce our liabilities and reinforces our efforts to emerge as a more robust airline. Together with the funds raised through our QIP, we are well-positioned to focus on growth, ungrounding our fleet, and expanding our services,” said Ajay Singh, Chairman and Managing Director of SpiceJet.

Recently, the airline concluded its qualified institutional placement, raising funds worth Rs 3,000 crore and allotted 487 million equity shares to qualified institutional investors. The company settled two disputes with lessors as soon as the QIP was concluded. 

Furthermore, the company announced to induct ten new aircraft into its fleet by the end of November 2024. The three planes will come from the grounded fleet and be reintroduced into service while the remaining seven will be leased.  

Sensex Vs SpiceJet

SpiceJet has fallen over 1.3% in the past five days, however, it has given a return of 3% in the last one month. But the stock has erased investors’ wealth by almost 6% in the last six months. It has risen 8.7% from year to date and raised investors’ wealth by more than 91% in the past one year. 

To compare, the benchmark index Sensex has fallen 1.5% in the last five trading sessions. However, it holds 0.8% of gains in the past month and gave a return of over 10% in the last six months. The index has investors’ money by almost 14% from year to date and 25% in the last one year.