SpiceJet settles $29.9-million dispute with aircraft lessor, more to go

The debt-laden airline is embroiled in numerous legal disputes with creditors and aircraft leasing companies over pending payments. Last week, SpiceJet secured an additional ₹316 crore in funding that will enable it to pursue its expansion plans and settle its dues. 

The airline has so far raised ₹1,060 crore, or nearly $130 million, through its preferential issue.

“With this resolution, we can now focus on revamping our fleet and driving our business forward,” Ajay Singh, chairman and managing director of SpiceJet, said in a statement on Wednesday.

SpiceJet had informed the National Company Law Tribunal on 26 February that it had resolved its dispute with Celestial Aviation and only needed to conclude formalities. The airline had sought a week’s time to fully settle the matter.

“The representatives of both parties informed a bench of NCLT last week that settlement terms had been reached and requested an adjournment. The court graciously granted the adjournment. The matter is now scheduled to be formally withdrawn on March 1, 2024,” SpiceJet said in the statement.

Celestial Aviation had initiated insolvency proceedings against SpiceJet in August citing the airline’s failure to pay $29.9 million for leasing nine aircraft. It was one of five leasing companies that had petitioned the NCLT for recovery of outstanding payments from SpiceJet. 

The tribunal has since rejected insolvency applications from Wilmington Trust SP Services (Dublin) and Willis Lease Finance Corp.

Alterna Aircraft BV Ltd, an Ireland-based lessor, recently filed an insolvency claim against SpiceJet at the NCLT demanding the repayment of $11.1 million and £265,000 as mandated by British courts. 

Another aircraft lessor Aircastle’s petition is still pending with the NCLT. The company has rejected SpiceJet’s offer to settle the dispute through an allotment of shares. 

On 22 February, the Delhi High Court directed SpiceJet to clear $2 million of its liabilities to engine lessors EAM France 01 SAS and Sunbird France 02 SAS. Additionally, the Supreme Court has directed SpiceJet to settle $1.25 million with Credit Suisse by March 15, mandating chairman Singh to appear in the court a week after the payout.

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Published: 28 Feb 2024, 03:30 PM IST