New Delhi: Low-cost carrier SpiceJet on Friday said it has made a payment of $1.5 million to Credit Suisse, following orders from the Supreme Court. The payment was executed on Thursday, according to a filing with the stock exchanges.
In a statement on Tuesday, the airline had said, “SpiceJet acknowledges the legal process and is committed to complying with all court’s directives and obligations in the Credit Suisse case and will make the payment of $1.5 million as per the court directive. Till date, SpiceJet has already paid a total of $8 million to Credit Suisse.”
Switzerland-based Credit Suisse had filed a plea with the apex court in March to initiate contempt proceedings against SpiceJet and its chairman and managing director Ajay Singh, citing alleged deliberate and intentional non-compliance with court orders and failure to settle a $3.9 million debt as stipulated in a prior settlement agreement between the parties.
Back in November 2011, SpiceJet, then owned by Kalanithi Maran, had signed a 10-year aircraft servicing and maintenance agreement with SR Technics, a Swiss maintenance, repair and overhauling (MRO) service provider.
The Swiss firm issued invoices, while SpiceJet issued seven bills of exchange to cover the debt. In September 2012, SR Technics formally gave Credit Suisse all rights to receive payments under the SpiceJet deal. However, the airline failed to make payments of over $24 million, prompting Credit Suisse to file a winding-up petition against SpiceJet in the Madras High Court in 2021.
On 6 December 2021, a single-judge bench of the Madras High Court allowed the winding-up of SpiceJet under Section 433 (e) of the Companies Act 1956, and directed the official liquidator to take over the assets of the airline. The airline had challenged the order before a division bench. The division bench upheld the single judge’s order. The airline had then challenged the ruling in the Supreme Court, which stayed the high court order, and gave the company three weeks to settle the matter.
Read here: SpiceJet-Credit Suisse Case: SC warns SpiceJet to settle Credit Suisse dues or face ‘drastic action’
The Gurugram-based airline is involved in several legal disputes with respect to payment of dues across the lessor community and with former promoter Kalanithi Maran.
On 14 September, SpiceJet said it has completed the payment of ₹100 crore to Sun Group chairman Kalanithi Maran, as per the Delhi High Court’s order regarding the execution of an arbitral award. SpiceJet owed ₹397 crore to Maran, and the court is scheduled to hear the rest of the case next on 3 October.
“While some airlines have adequate liquidity and/or financial support from a strong parent, supporting their credit profile, the credit metrics and liquidity profile of the others will remain stressed over the near term, notwithstanding some improvement relative to the last few years,” rating agency Icra Ltd. had said in a recent note on the Indian aviation industry.
At the time of writing, shares of SpiceJet traded 2.7% higher at ₹39.42 on the BSE. As per domestic air traffic data for August, the airline carried around 540,000 passengers, with market share at 4.4%, compared with a 7.9% share a year ago, and 15.5% in August 2019.
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Updated: 15 Sep 2023, 01:41 PM IST
