 "SpiceJet jumps 4% on reaching settlement deal with Cross Ocean Partners")
Shares of SpiceJet jumped 4 per cent to hit a high of Rs 65 in an otherwise weak market after the low-cost air carrier reported a settlement deal with aircraft leasing firm, Cross Ocean Partners.
At 12:55 pm, the stock traded with a gain of 2.5 per cent at Rs 64.20. The counter saw trades of around 3.22 million shares as against the two-week average volume of around 4.14 million shares. Meanwhile, the S&P BSE Sensex had recouped losses and was down 0.1 per cent at 73,829.
SpiceJet in an exchange filing today said, the airline has reached settlement terms with aircraft leasing firm, Cross Ocean Partners, resolving a dispute of about $11.2 million (Rs 93 crore). The parties made this joint announcement before the Delhi High Court in the ongoing execution petition being pursued by Cross Ocean Partners.
The settlement is expected to result in significant savings for SpiceJet and also put an end to dispute. As part of the arrangement, the airline will also benefit from transfer of airframe and an engine at no additional cost, augmenting its operational capabilities, the release added.
Commenting on the development, Ajay Singh, Chairman and Managing Director of SpiceJet, said, "We are pleased to have reached a mutually acceptable resolution with Cross Ocean Partners, which will result in significant cost savings for SpiceJet and also cease prolonged expensive litigation. This settlement reinforces our commitment to effectively settle with our partners and strengthen our operational capabilities. We remain focused on sustaining the positive momentum and creating long-term value for our stakeholders."
Couple of week ago, SpiceJet had concluded a similar agreement with Celestial Aviation, a subsidiary of AerCap, for deal valued at $29.9 million (Rs 250 crore).
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The company said, both these settlements, further underscores SpiceJet's dedication to resolving disputes and strengthening its financial position.
Further, SpiceJet on Monday said Abu Dhabi's sovereign wealth fund ADIA has acquired shares of the airline from the open market.
A PTI report stated that, as per a source close to the airline, Abu Dhabi Investment Authority (ADIA) started buying shares in late February.
In recent weeks, the carrier has raised a total of Rs 1,060 crore through preferential issuance of securities.