SpiceJet Ltd shares rose 3.87 per cent to hit a day high of Rs 65 in Tuesday’s deals. This comes after SpiceJet on Tuesday informed the Delhi High Court that it has settled its Rs 93 crore-dispute with aircraft leasing firm Cross Ocean Partners.
As a part of this settlement, SpiceJet will acquire additional assets including an airframe and an engine. The company said it expects substantial savings as a result of this settlement.
“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 airline stated.
“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,” said Ajay Singh, Chairman and Managing Director, SpiceJet in a statem ..
In addition to this settlement, SpiceJet recently concluded a similar agreement with Celestial Aviation, a subsidiary of AerCap, one of the largest aircraft lessor groups. The settlement was valued at $29.9 million (Rs 250 crore).
On technical setup, the counter was trading higher than the 5-day, 100-, 150-day and 200-day simple moving averages (SMAs) but lower than the 10-day, 20-, 30-day and 50-day SMAs. The stock’s 14-day relative strength index (RSI) came at 48.90. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company’s stock has a negative price-to-equity (P/E) ratio of 47.25 against a negative price-to-book (P/B) value of 1.61.
SpiceJet has been facing headwinds for the last couple of quarters for want of funds, leading to the grounding of a number of aircraft and returning some of the leased planes to the lessors.
Some of its lessors have dragged the airline even to court for non-payment of lease rentals.
SpiceJet in late February said it raised an additional Rs 316 crore through a preferential share issue, taking its overall fundraise to Rs 1,060 crore. In January SpiceJet had received Rs 744 crore as the first tranche of funds through the allotment of securities on a preferential basis.
On December 12, the airline had said it would raise fresh capital of Rs 2,250 crore through issuance of securities.
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