You've money to buy Go First but not to pay Credit Suisse: SC to Ajay Singh

“You have the money to buy Go First but not pay Credit Suisse,” the Supreme Court on Monday asked SpiceJet Chairman and Managing Director Ajay Singh while directing him to shell out the outstanding dues to the Swiss firm by March 15.

“Why don’t we take judicial notice of newspaper reports that you’re planning to take GoAir (now Go First)? You have that much cushion and you won’t repay?” the court said while directing Singh to be present on the next date of hearing, which is March 22.

Credit Suisse and SpiceJet have been entangled in a legal conflict since 2015 over outstanding debts of approximately $24 million. Credit Suisse told the apex court it was to receive $15 million by February 15. However, only $13.75 million was paid.

 

In September last year, the court permitted SpiceJet to pay the Swiss firm an extra $3 million in six months to settle its dues. SpiceJet was already paying Credit Suisse $500,000 per month and the court directed it to pay an additional $500,000 per month for six months. 

The court had observed SpiceJet was behind on monthly payments by $3 million and directed the airline to regularise its payment from the seventh month ($500,000).

The court on Monday told the airline to pay $1.25 million by March 15 in addition to its monthly payments.

In August 2022, both parties informed the court of reaching an agreement. However, in March 2023, Credit Suisse initiated a contempt case against Singh and the airline, stating that SpiceJet had not honoured its payment obligations outlined in the settlement terms.

In 2011, the airline had entered into a 10-year contract with Swiss maintenance firm SRT Technics for aircraft servicing. In 2012, SRT transferred its right to recover the payment for maintenance to Credit Suisse.

Singh and Busy Bee Airways Pvt Ltd (BBAPL) have jointly submitted a bid for insolvent airline Go First, which ceased to fly in May last year. Moreover, Sharjah-based Sky One announced submitting a bid for the airline.

BBAPL, an East Delhi-based company, has Paul Gomes and Pran Sathiadasan as 50-50 shareholders, according to the latest documents filed with the Ministry of Corporate Affairs in November 2023. The documents have been reviewed by Business Standard.

Singh said in a statement he believed Go First held potential and could be revitalised to work in synergy with SpiceJet, benefiting both carriers.

While SpiceJet recently raised funds, the airline has been facing a cash crunch for several quarters. It is dealing with multiple court cases regarding money owed to former owner Kalanithi Maran, aircraft lessors, and engine lessors, apart from Credit Suisse. Earlier this month, SpiceJet said it was laying off a certain percentage of employees to save up to Rs 100 crore per year.


In line of fire

2011: SpiceJet signs 10-year aircraft maintenance agreement with SR Technics
 

2012: SR Technics transfers dues collection rights to Credit Suisse
 

2013: SR Technics invoices SpiceJet for $24 million
 

2015: Credit Suisse initiates legal action in Madras High Court (HC) to collect dues
 

2021: Madras HC orders SpiceJet to wind up; airline appeals to Supreme Court (SC)
 

2022: SC halts winding up process; SpiceJet and Credit Suisse settle
 

2023: Credit Suisse files contempt case for breaching settlement agreement; SC warns SpiceJet to pay $1.5 million by Sept­ember 15 or face drastic action
 

2024: SC tells airline to pay outstanding dues to Credit Suisse by March 15