 "SpiceJet faces new insolvency case over Rs 58 crore unpaid dues to lessor")
SpiceJet is facing a new insolvency case filed by aircraft lessor Aviator ML 29641 Ltd in the National Company Law Tribunal (NCLT) over unpaid rental dues totalling around Rs 58 crore. The case revolves around a lease agreement for a Boeing 737 aircraft signed on June 16, 2017, according to a report by Mint.
According to the lessor, as of June 29, 2024, the outstanding dues amount to around $7.3 million.
During the hearing on Monday, the NCLT chose not to issue a notice to SpiceJet, citing the absence of a response from the airline to the demand notice in the lessor’s petition. The tribunal has allowed the airline time to file its response, scheduling the next hearing for November 11, the report said.
The counsel for Aviator ML 29641 Ltd informed the tribunal that SpiceJet had attempted to negotiate a settlement but failed to reach any resolution, leading to the initiation of insolvency proceedings.
Legal troubles for SpiceJet
This latest case adds to a series of insolvency petitions against SpiceJet, primarily related to unpaid dues to various vendors and lessors. Though several cases have been filed, none have led to insolvency proceedings so far. Some cases were dismissed by the NCLT, while others were withdrawn following settlements, and several remain unresolved.
Parties who have previously filed insolvency cases against SpiceJet include Wilmington Trust SP Services (Dublin), Willis Lease Finance, Celestial Aviation, Aircastle, and Alterna Aircraft. Additionally, entities like AWAS 36698 Ireland, AWAS 36694 Ireland, AWAS 36695 Ireland, Shannon Engine Support Limited, Engine Lease Finance B V, Raymach Technologies, and Techjockey Infotech have also pursued legal action.
The NCLT has dismissed insolvency pleas from Willis Lease Finance and Wilmington Trust SP, while SpiceJet settled with Celestial Aviation, Alterna Aircraft, and Raymach Technologies.
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Recent settlements
SpiceJet recently reached a settlement with Irish aircraft lessor Babcock & Brown Aircraft Management, resolving a $131.85 million dispute. This settlement comes on the heels of the airline being able to raise Rs 3,000 crore capital through a Qualified Institutional Placement (QIP). The airline is also set to receive Rs 736 crore from an earlier funding round, further strengthening its financial position.
SpiceJet’s financial difficulties have led to court orders mandating the grounding of leased engines and aircraft due to unpaid dues.
Despite these setbacks, Chairman and Managing Director Ajay Singh has plans to expand SpiceJet’s fleet to 100 aircraft by 2026. The airline also aims to bring its 36 grounded planes back into operation, with expectations to have 40 aircraft in service by March 2025, matching the fleet size of competitor Akasa Air, the report said.