 "SpiceJet")
Low-cost airline Spicejet on Monday settled a Rs 100 crore loan to City Union Bank (CUB) by repaying Rs 25 crore as a part of the loan account’s final tranche, the company said in a press release.
In August 2022, the airline had agreed to repay its dues till June this year. With the latest settlement, the company has closed its loan account taken in 2012.
The company had also pledged 20 million shares with the bank as collateral owned by the airline’s promoters, according to media reports.
The recent settlement of Spicejet’s loan releases all securities that the company had pledged with the bank.
“The repayment to City Union Bank follows a successful settlement agreement with Nordic Aviation Capital (NAC), a major lessor for SpiceJet’s Q400 aircraft. The agreement with NAC settles all past liabilities for the Q400s leased by NAC to SpiceJet and paves the way for the return and induction of three additional planes into the SpiceJet fleet,” the airline added.
The bank had marked the carrier’s account as a special mention account-1 (SMA1) in March last year. The airline filed an appeal in the court against the bank’s declaration of SMA-1 in April.
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A company is classified as SMA-1 if the principal or interest is overdue between 31-60 days.
Moreover, the cash-strapped airline has incurred losses since FY19. The company’s consolidated net loss swelled to Rs 1,744 crore in FY22 from Rs 1,030 crore in FY 21.
It has not released FY23 results citing ‘medical incapacitation’ of a key member of its audit committee.
