SpiceJet has announced a key resolution in its ongoing legal battles by settling its $16.7 million dispute with Engine Lease Finance Corporation (ELFC). The settlement amount remains undisclosed but is lower than the original claim, marking a significant breakthrough for the airline in clearing its financial hurdles, reported The Economic Times.
Representatives from both SpiceJet and ELFC are preparing to formalise the agreement, which will effectively conclude all legal disputes between the two parties. As part of this resolution, ongoing litigation will be withdrawn, the airline informed stock exchanges. This marks a key milestone in SpiceJet’s efforts to restructure its operations and prioritise long-term growth.
“We are pleased to have reached a mutually beneficial settlement with ELFC, which allows us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on our next phase of growth and expansion,” said Ajay Singh, chairman and managing director of SpiceJet.
Spicejet, ELFC dispute
ELFC, the world’s leading independent engine leasing company based in Shannon, Ireland, had leased eight engines to SpiceJet in 2017. The company claimed around $16 million in unpaid dues, including interest and rental, with default payments stretching back to April 2021.
The matter escalated to the National Company Law Tribunal (NCLT), where SpiceJet had initially raised objections, citing technical defects in ELFC’s plea. The tribunal granted ELFC the opportunity to rectify these errors, after which a formal notice was issued to the airline.
SpiceJet’s history of insolvency
This is not the first time SpiceJet has faced insolvency claims. The airline has been dealing with multiple petitions from creditors, including Willis Lease Finance, Aircastle Ireland Ltd, Wilmington Trust, and Celestial Aviation. While the NCLT dismissed some of these pleas, others, including cases filed by Aircastle and Alterna Aircraft, are still pending.
SpiceJet has managed to settle disputes with some creditors, including Celestial Aviation, but several cases have been escalated to the National Company Law Appellate Tribunal (NCLAT) by dissatisfied petitioners.
In a parallel effort to stabilise its financial standing, SpiceJet recently announced plans to raise Rs 3,000 crore by issuing and allotting approximately 48.71 million equity shares to qualified institutional buyers at Rs 61.60 per share.
First Published: Sep 24 2024 | 11:48 AM IST
