Lessors reject SpiceJet CMD Ajay Singh's pledge of shares to pay dues
Citing the depreciation of their assets, the lessors sought the grounding of the airline and the return of the engines
 "Lessors reject SpiceJet CMD Ajay Singh's pledge of shares to pay dues")
Engine lessors of SpiceJet on Monday rejected its Chairman and Managing Director (CMD) Ajay Singh’s offer to pledge his personal shares, equivalent to the outstanding dues of $2.5 million, to pay its debts.
The cash-strapped airline told the court that they are willing to pledge Singh’s own shares if the airline is unable to make payments by September 30.
"We are not putting any conditions. The court can pass orders for immediate release if we don’t pay between now and September 30,” the airline’s counsel said.
The lessors, however, said they don't want the 'pledge of shares of a company whose existence is shaky.' The pledge is not acceptable. The court said that the lessors are unsure about the volatility of the shares and asked Singh if he could double the shareholding for the pledge.
“We can give them 15 days to return our three engines. They can take off the engines from the aircraft in a day and we can have the inspection of the engines to gain clarity on their health,” the lessors told the court.
Citing the depreciation of their assets, the lessors sought the grounding of the airline and the return of the engines.
But SpiceJet said this was not possible as it would disrupt the airline’s operations, given that bookings have already been made.
The matter is now posted for August 14.
The engine lessors, Team France and Sunbird France, had filed a case against SpiceJet in December, claiming dues of more than $20 million for the engines.
The court had on Thursday told SpiceJet to confirm by Monday if their directors would pledge personal guarantees to pay the engine lessors for three engines.
Coming down on the cash-strapped airline, the court had said, "You’ve been repeatedly giving undertakings to the court. If you’re not in a position to pay, then you should ground these engines. Why are you using them if the company is unable to pay?"
The lessors also told the court on Monday that the affidavit filed by the airline had lost all its sanctity.