SpiceJet Faces Insolvency Petitions for USD 32 Million Debt

SpiceJet (SG, Delhi International) is facing two new insolvency petitions filed in India’s National Company Law Tribunal (NCLT), with the airline now in dispute over debts totaling USD 32 million. The petitions, filed by Irish lessors Sabarmati Aviation and JetAir 17, claim the low-cost carrier owes USD 5 million and approximately USD 27 million, respectively.

These new claims add to the mounting list of creditors seeking to recover outstanding amounts from SpiceJet. The airline has been facing ongoing legal challenges from various lessors and suppliers, some of whom are attempting to use NCLT proceedings to force SpiceJet to pay its debts.

At a November 18 hearing, SpiceJet’s counsel, Krishnendu Datta, addressed the Sabarmati claim, stating that the airline would respond in due course. Regarding the JetAir 17 petition, Datta argued that JetAir 17 lacked standing as an operational creditor, as SpiceJet had originally entered into the relevant lease contract with Wilmington Trust SP Services (Dublin), not JetAir. The airline’s counsel further claimed that JetAir 17 had not provided sufficient evidence to prove it had inherited the lease agreement from Wilmington Trust. As a result, the NCLT has ordered JetAir 17 to submit documents proving the transfer of the leasehold interest.

The filings from Sabarmati and JetAir 17 follow a series of insolvency petitions filed in October. Falgu Aviation Leasing Limited submitted a petition to recover USD 8.1 million, while Aviator Capital SPV, Aviator ML 29641 Limited, filed a petition over a USD 7 million debt. Additionally, Eusu Logistics India Pvt. Ltd. claims SpiceJet owes approximately USD 230,800 for unpaid freight services and has also filed an insolvency petition.

These creditors join others, including TechJockey InfoTech Private Limited, Alterna Aircraft V.B. Limited, and DAE Capital special purpose vehicles (SPVs), which include AWAS 36695 Ireland Limited, AWAS 36698 Ireland Limited, and AWAS 36694 Ireland Limited, all attempting to have SpiceJet declared insolvent or compelled to settle its debts.

Despite these challenges, SpiceJet has recently made efforts to reduce its list of complainants at the NCLT. The airline has successfully settled several disputes, including those involving Aircastle, BBAM SPVs, Wilmington Trust SP Services, and Engine Lease Finance Corporation. These settlements have helped the airline manage its financial obligations and reduce the number of ongoing legal battles.

The NCLT has scheduled a hearing for December 3, 2024, to revisit the Sabarmati and JetAir 17 insolvency matters. The outcome of this hearing will determine whether the airline is required to make any payments or face further legal action from its creditors.

SpiceJet’s mounting legal challenges highlight the ongoing financial strain faced by the airline, as it continues to navigate disputes with creditors while managing its operations in an increasingly competitive aviation market.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com