SpiceJet’s Insolvency Woes Continue

Legal Troubles Mount for SpiceJet

A lessor and a logistics company have recently filed new insolvency petitions against SpiceJet. This comes after the low-cost carrier announced that it had settled a lease dispute with another entity.

Eusu Logistics India Pvt. Ltd claims it is owed INR 19.4 million (approximately USD 234,729) for unpaid freight services. Meanwhile, aircraft lessor Falgu Aviation Leasing Ltd informed the National Company Law Tribunal (NCLT) that it was owed USD 8.1 million during the initial hearings last week.

The two companies have joined TechJockey InfoTech Private Limited, Alterna Aircraft V.B. Limited, and DAE Capital, along with the special purpose vehicles (SPVs) AWAS 36695 Ireland Limited, AWAS 36698 Ireland Limited, and AWAS 36694 Ireland Limited, and Aviator Capital’s SPV, Aviator ML 29641. They are all involved in India’s specialist bankruptcy court, seeking to recover funds owed by SpiceJet.

Separately, during an October 25 appearance before the tribunal, SpiceJet’s counsel said it had settled with Shannon Engine Support Limited. The lessor claimed USD 4.5 million, but the airline said they settled for USD 2 million. SpiceJet calls the settlement “amicable” and says this ends all legal proceedings between the parties.

The Shannon deal follows the airline’s recent agreement with Aircastle Ireland Limited, which had three separate insolvency petitions in the NCLT, each concerning different aircraft, and with Wilmington Trust SP Services (Dublin). SpiceJet reports that these settlements have cost the company approximately USD 5 million.

Earlier this month, SpiceJet resolved a $22.5 million lease dispute with three BBAM SPVs. In late September, the carrier settled a $16.7 million claim with Engine Lease Finance Corporation for an undisclosed amount. All three settlements follow the airline raising INR 30 billion (USD 360 million) in September, part of which was set aside to pay lease arrears and other financial liabilities.