SpiceJet Repays $24 Mn to Credit Suisse Amid Widening Losses

SpiceJet made payments worth $24 million to wealth management firm Credit Suisse, marking a substantial reduction in its debt. The low-cost airline, in a statement on Monday, said as it moves in the direction of growth and profitability, the development marks a significant step towards resolving its legacy issues. 

“The completion of this payment is another important step in our continued efforts to put legacy issues firmly behind us. This settlement not only brings closure to an old liability but also demonstrates our resolve and ability to meet commitments despite a challenging operating environment,” said Chief Business Officer, SpiceJet, Debojo Maharshi. “SpiceJet today is financially stronger, more resilient, and fully focused on growth and profitability,” Maharshi added.

The debt repayment marks completion of the terms of the settlement agreement signed between SpiceJet and Credit Suisse in May 2022. Initially, the total claim stood at around $41.77 million, and later the parties agreed to settle for $24 million in a structured payment plan. 

The company has a total debt of ₹5379 crore as of March 31, 2024, of which lease liability was ₹4227 crore, as per a CareEdge report from January this year.  The credit rating agency also noted that in FY25, the company settled and paid off its outstanding external commercial borrowings which stood at ₹188 crore as on FY24.  

The report noted that SpiceJet raised about ₹3878 crore between FY24 and FY25. Among the major ones were a preferential issue subscribed by the promoter group in September 2023 of ₹494 crore and a preferential issue of ₹1060 crore in January-February 2024, of which ₹678 crore has been received till September 30, 2024. The company also received about ₹3000 crore in QIP issues in September 2024. 

Against these funds, the rating agency said that the company has utilised about ₹3287 crore towards payment of pending statutory dues, settlement of creditors, uplifting and ungrounding of fleet and new induction, settlement of external commercial borrowings, and servicing debt obligations, among others. 

The rating agency at the time had noted that the low-cost airline would repay FY26 debt “from mix of projected cash profits and cash & cash equivalents in case of deficit.” 

In its first quarter result of FY25, the airline reported a net loss of ₹238 crore compared to a net profit of ₹150 in Q1 FY25. During the same period, its EBITDA, operational profitability, plunged to negative ₹18 crore compared to ₹402 crore in the same period last year.