US stressed assets firm Avenue Capital partners SpiceJet over aircraft
Photo Credit: Reuters

SpiceJet, India’s second-largest airline by passengers, has announced a tie-up with US investor Avenue Capital for financing, acquisition, sale and lease‐back of up to 50 new aircraft. 

Avenue Capital, headquartered in New York, is a global asset manager focused on distressed debt besides having expertise in aircraft leasing. Founded in 1995 by senior principals Marc Lasry and Sonia Gardner, the firm manages assets estimated to be approximately $11.2 billion as of February 28. 

It has been making investments in India since 2005. Currently, the US investor holds around 27% stake in Asset Reconstruction Company (India) Ltd (Arcil). Avenue Capital previously picked up stakes in Punj Lloyd, GPI Textiles Ltd, Morepen Laboratories Ltd, SKIL Infrastructure Ltd, as per VCCEdge. 

The investor has identified new planes to be ordered by the airline as a unique opportunity for investment, SpiceJet said. 

“We are delighted to enter into this strategic alliance with Avenue Capital and we look forward to closely working with them. This alliance will ensure a seamless induction of the planes in our fleet and help us plan better for the long term,” said Ajay Singh, chairman and managing director, SpiceJet. 

Earlier this month, the homegrown budget carrier had announced the launch of 66 new domestic flights to augment connectivity between metro and non-metro cities. The new flights have commenced operations from March 28. 

Currently, the Gurugram-based airline operates a fleet of Boeing 737s, Bombardier Q-400s and freighters and is the country’s largest regional player operating 63 daily flights under UDAN or the regional connectivity scheme.  

Recently, HDFC Mutual Fund through its schemes sold shares through open market transactions to reduce stake in Spicejet from 5.04% to 2.02%. 

For the third quarter ended December 2020, Spicejet reported a consolidated net loss of Rs 66.7 crore, down from Rs 77.9 crore a year ago and Rs 105.6 crore in Q2FY21 ending September 2020. 

Its total income stood at Rs 1,901.6 crore as compared with Rs 3926.5 crore in December last year and Rs 1,422 crore in Q2FY21. 

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