SpiceJet resolves $16-million dispute with aircraft lessor Genesis; shares jump nearly 9%

SpiceJet shares jumped nearly 9% on the Bombay Stock Exchange on Thursday after the cash-strapped airline announced an amicable settlement with aircraft lessor Genesis to resolve a dispute worth over $16 million. As part of the agreement, SpiceJet will pay $6 million in cash and issue $4 million worth of equity to Genesis at a price of ₹100 per share.

The settlement includes withdrawal of all ongoing litigations and disputes related to the matter, subject to fulfillment of the agreed terms, the airline said in a statement.

Ajay Singh, Chairman and Managing Director of SpiceJet, described the deal as a "crucial step" in the airline’s efforts to enhance financial stability. “This agreement, which includes Genesis acquiring an equity stake in SpiceJet, will significantly reduce our financial liabilities and further strengthen our balance sheet,” Singh said.

SpiceJet shares were trading at ₹60.50 apiece on the BSE at 11.50am, up 7.5% from the previous close as investors reacted positively to the news of the settlement.

In September 2024, Carlyle Aviation agreed to convert $30 million of lease arrears into SpiceJet equity at ₹100 per share. Earlier, the airline had settled disputes with various other lessors, including Horizon Aviation, Engine Lease Finance Corporation, Aircastle, Wilmington Trust SP, Shannon Engine Support Ltd and Export Development Canada.

The Genesis settlement is the latest in a series of steps by SpiceJet to resolve financial issues and revive its operations. The airline recently raised ₹3,000 crore through a Qualified Institutional Placement (QIP), and, according to its chairman, has used the funds to settle 70% of claims with lessors and vendors.

SpiceJet plans to operate 35 aircraft by March 2025, increasing this to 70 by FY26 and 100 by FY27, when it aims to achieve cash-flow positivity.