Pay $4 million to engine lessors by February 15, Delhi HC tells SpiceJet

The Delhi High Court on Monday told low-cost carrier SpiceJet to pay $4 million to its engine lessors Team France 01 SA and Sunbird France 02 SAS by February 15.

The airline had sought more time for payment and said they could pay $1 million upfront. SpiceJet is supposed to pay close to $11 million to the lessors.

The lessors told the High Court that the airline had made an offer to settle the dispute but the terms of the offer were not aggregable to them. They said now they wish to pursue litigation against SpiceJet. The next hearing in the case is on February 22, 2024.

The court on December 19, 2023, had told the airline to pay the two lessors $450,000 by January 3 to settle its outstanding dues. Spicejet has paid this amount and the lessors are now pushing for a further payment to clear the amount outstanding.

The lessors had told the court that the airline had not paid them $12.9 million in over two years. They also observed that the airline was using its three engines even after the termination of the lease.

"In case of default, we can give them 10 days within which the engine should be grounded," the lessors told the High Court.

They said that they have received the first tranche of $90 million and the next tranche of $4 billion in cash will be received soon.

Currently, insolvency applications of three aircraft lessors, namely Aircastle (Ireland), Willis Lease Finance Corporation, and Celestial Aviation, are being heard before the National Company Law Tribunal against SpiceJet over non-payment of their dues in 2023.

In the Supreme Court (SC), SpiceJet is in a battle with Credit Suisse over non-payment of dues. In September, the SC permitted SpiceJet to pay the Swiss firm $1 million per month for six months to settle its $3 million arrears.

SpiceJet on Friday said it has received Rs 744 crore as the first tranche of funds being raised through allotment of securities on a preferential basis.

On December 12, the airline had said it would raise fresh capital of Rs 2,250 crore through issuance of securities.

According to a release, on January 25, the company's board of directors approved the allotment of 5.55 crore equity shares on a preferential basis to 54 subscribers.

The airline has allotted shares and warrants totalling Rs 744 crore on a preferential basis in the first tranche.

According to news reports, the airline, In an internal note to the senior staff last Monday, said it now has a substantial bank balance of more than Rs 900 crore, including Rs 160 crore received as an instalment under the government's Emergency Credit Line Guarantee Scheme (ECLGS).

“The Company is in constant discussion with Team to settle the matter and has also provided a payment plan for the same which is pending consideration. We are confident of resolving the matter,” said SpiceJet spokesperson. 

NCLT dismisses lessor's plea against Spicejet

The National Company Law Tribunal (NCLT) on Monday dismissed an insolvency plea by aircraft lessor Wilmington Trust SP Services (Dublin)."The insolvency plea stands dismissed," a bench of NCLT said. Spicejet had told the NCLT that aircraft lessor Wilmington Trust SP Services is not entitled to receive rental amounts from them as the invoices raised by them vested the right of payment to Aircastle(Ireland) and not Wilmington. Wilmington had moved an insolvency plea against SpiceJet in June 2023 over unpaid dues. In May 2023, the Directorate General of Civil Aviation (DGCA) deregistered three planes of SpiceJet at the request of lessors, one of the aircrafts belonged to Wilmington.