India: Spicejet Faces Insolvency Petition Over Unpaid Dues

2023-05-09 04:40:00

(MENAFN- Khaleej Times) Indian airline SpiceJet has been served a notice from the National Company Law Tribunal (NCLT) after Irish aircraft lessor Aircastle filed a petition seeking the initiation of insolvency proceedings against the carrier.

A source, quoted in a local media report, said the airline "hasn't paid lease rentals, and both parties are unable to get on the same page, hence, the petition has been filed".

In a statement issued on Monday, SpiceJet stressed that there was no adverse ruling against the airline.

"Notice was issued in normal course...The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same," the budget carrier said.

Lawyers for Aircastle reportedly filed the petition on April 28. Earlier this month, they were able to move the application under the Insolvency and Bankruptcy Code (IBC) 2016, giving "the debtor 10 days from delivery of the notice or invoice to make a payment or lodge a dispute", a report added. Then, they proceeded to file for insolvency resolution.

The NCLT issued the notice to SpiceJet and directed it to list the matter on May 17 for the next hearing.

Last week, SpiceJet mobilised a plan to revive its 25 grounded aircraft.

The airline said funds for the revival would be drawn from the government's Emergency Credit Line Guarantee Scheme (ECLGS) and better cash accruals. The airline has already mobilised around Rs 400 crore towards getting its grounded fleet back in the air, which will further enhance its top line.

Ajay Singh, chairman and managing director of SpiceJet, said: "We are meticulously working towards return to service of our grounded fleet back in the air soon. The majority of the ECLGS funding received by the airline would be utilised for the same, which will help us capitalise and make the most of the upcoming peak travel season."

The budget airline expects a stronger balance sheet, post-hive-off of SpiceXpress.

(With inputs from ANI)

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