NCLT chides SpiceJet as last-minute lessor deal forces judgement delay

An Indian bankruptcy court rebuked SpiceJet on Monday over a last-minute settlement with one of eight aircraft lessors whose ​bankruptcy petitions were due for rulings, saying it wasted judicial time ​in the latest sign of financial stress at the country's fourth-largest carrier.

The court pressed ‌SpiceJet on whether more deals were coming.

"It makes a mockery of the entire thing," one of the National Company Law Tribunal judges said, criticising the parties for waiting until the day of the ruling to disclose the settlement. "It's not right."

The hearing took place as years of legal disputes between SpiceJet and the firms that lease it aircraft appeared set to culminate in rulings on eight bankruptcy petitions.

 

The cases have put SpiceJet's finances under renewed scrutiny, with admission of even one bankruptcy petition potentially triggering a court-supervised resolution process under which an independent professional would take control of the airline while creditors considered ‌a restructuring.

The tribunal judges said substantial time had already been spent hearing arguments and preparing a judgement, but agreed to defer the judgement until Wednesday after the parties asked for time to put the settlement agreement before it.

STRUGGLING AIRLINE UNDER INTENSE PRESSURE

The court also grappled with whether that development affected seven other SpiceJet insolvency cases that were also due for judgement but in which there had been no settlement. Lawyers for some of the other lessors repeatedly ​urged the court to pronounce its rulings.

"They are taking chances, and they are playing fast and loose," said ‌Kevic Setalvad, who appeared for lessor Alterna Aircraft.

SpiceJet did not immediately respond to a request for comment.

SpiceJet, once India's second-largest domestic airline, has slashed flights, grounded aircraft and ​delayed salaries ‌to pilots as it grapples with a funding crunch after years of losses and legal disputes. Its ‌domestic market share was 1.9% in June from about 15% in 2019.

The airline has received 1.5 billion rupees ($15.69 million) under a government-backed credit programme to stabilise operations, but pressure from ‌aircraft ​lessors has continued.

Two ​entities owned by the leasing arm of China's ICBC sought to deregister four Boeing 737 MAX aircraft leased to SpiceJet in July, while at least two lessors ‌had served payment ​default notices on the airline this year, Reuters has reported.