SpiceJet clears Rs 100-crore debt with City Union Bank, stock surges

3 Jul 2023 , 02:37 PM

SpiceJet, the cash-strapped low-cost airline, has successfully completed the payment of Rs 100 crore to City Union Bank. The final installment of Rs 25 crore was made on June 30, 2023, as confirmed by the airline in its communication to the exchanges on July 3.

This payment effectively closes the entire loan account, which was originally taken in 2012. With the repayment of the loan amount, all the pledged securities that were held by the bank have been released, as stated in the airline’s announcement.

Furthermore, SpiceJet has reached an agreement with Nordic Aviation Capital (NAC), a significant lessor of Q400 aircraft for the airline. This agreement resolves all previous liabilities related to the Q400s that were leased by NAC to SpiceJet. As a result, it clears the way for the return and addition of three additional planes to the SpiceJet fleet, as mentioned in the statement.

The airline’s statement emphasized SpiceJet’s commitment to amicably settling outstanding debts with all its creditors, as it continues to rebuild its fleet and business. Currently, SpiceJet operates Boeing 737s and Q-400s, while also serving regional routes under the UDAN scheme.

At 2.34 PM, SpiceJet trades at Rs 27.80, 2.02% higher from previous close of Rs 27.25.