SpiceJet informed the NCLT that an agreement had been reached with Aviator ML overnight and that the first tranche of the payment had already been made. The tribunal was scheduled to pronounce its order in the Aviator ML insolvency case on Monday.
However, other lessors argued that the settlement was a “malafide” plea by SpiceJet aimed at blocking the eight insolvency petitions by settling with one creditor. They described the move as SpiceJet’s “buy one and get eight free” plan.
The combined dues claimed by lessors across the eight insolvency petitions exceed ₹500 crore, according to submissions before the tribunal.
The NCLT reprimanded SpiceJet for disclosing the settlement when the court was scheduled to pronounce its final orders. The tribunal said multiple opportunities had been given to the airline to settle the disputes and noted that the case was already around two years old.
The tribunal deferred its judgment in the Aviator ML case to August 19. Since the Aviator ML matter is linked to claims made by other lessors, the NCLT also deferred its judgment in the other cases.
The insolvency plea by Aviator ML was argued by Senior Advocates Ramji Srinivasan and Anandh Venkataramani, along with Saket Satapathy, Partner at Tuli & Co. SpiceJet was represented by Senior Advocate Krishnendu Datta.
Eight insolvency petitions against SpiceJet
The NCLT had reserved its judgment on a batch of eight insolvency petitions filed by six different aircraft lessors against SpiceJet.
The lessors include Sabarmati Aviation, JetAir 17, Falgu Aviation, Alterna Aircraft, Aviator ML and AWAS Ireland. The petitions were filed under the Insolvency and Bankruptcy Code (IBC), with the lessors seeking initiation of insolvency proceedings against SpiceJet over alleged non-payment of dues.
Aviator ML’s petition relates to an alleged default of around ₹60 crore concerning a Boeing 737 aircraft leased to SpiceJet.
The NCLT had reserved its order in the Aviator ML case on July 29, with a judgment expected shortly. One of the members who heard the matter was due to retire.
The cases are part of a series of legal disputes SpiceJet has faced with aircraft lessors and other creditors over unpaid lease rentals, maintenance obligations and other contractual dues.
SpiceJet has previously reached settlements with several lessors, including Aircastle, Celestial Aviation and Wilmington. However, it continues to face legal action from lessors including Aviator ML, Sunbird France 02 SAS and CIT Group Finance.
SpiceJet’s IBC challenges continue
The settlement with Aviator ML does not bring an end to SpiceJet’s insolvency-related challenges. The airline is also facing fresh insolvency petitions filed by NGF Alpha, NGF Genesis, NGF Charlie and NVS Brokerage.
Had the NCLT admitted the insolvency petitions, it would have triggered the corporate insolvency resolution process against SpiceJet under the IBC.
The legal challenges come as SpiceJet continues to manage liquidity pressures and work to address its financial obligations.
The airline said on July 31 that salaries for May had been disbursed to junior and support staff, while payments to remaining employees were being released in phases. It did not specify a timeline for completing the salary payments.
SpiceJet was also operating 85 daily flights, against around 140 flights proposed under its Summer Schedule. The airline said it had 14 operational aircraft, including three Airbus A320 aircraft operating under damp lease arrangements.
Its domestic market share stood at 1.9% in June, down from 3.9% in January, according to industry data.
SpiceJet has been pursuing measures to strengthen its financial position through fundraising, inducting leased aircraft and addressing pending financial obligations.
Shares of the company were trading 1.12% lower at ₹11.47 as of 1:26 pm on Monday. The stock has declined nearly 62% so far this year and more than 64% over the last 12 months.
