Delhi HC orders SpiceJet to pay $4 million to engine lessors by 15 February

New Delhi: The Delhi high court on Monday ordered low-cost carrier SpiceJet to pay $4 million to two engine lessors, Team France 01 SAS and Sunbird France 02 SAS, by 15 February. Failure to do so could lead to grounding of the leased engines.

The engine lessors had demanded a $5 million pay-out by the 15 February deadline, but the court settled on a $4 million payment from cash-strapped SpiceJet.

The court turned down SpiceJet’s plea to pay $1 million now and the balance in a staggered manner.

The lessors, Team France 01 SAS and Sunbird France 02 SAS, had claimed unpaid dues of $12.9 million for over two years. The court had also considered barring the airline from using three engines following lease termination.

During the hearing, SpiceJet’s lawyer detailed a settlement plan to the lessors. The airline offered to pay $8 million in instalments, with $1 million to be paid immediately. This payment was to come from a first tranche of around 744 crore of funding which the airline has raised, with two more tranches pending approval of the markets regulator. The lawyer also noted that SpiceJet has multiple creditor dues to settle from this funding.

The lessors rejected SpiceJet’s offer, emphasizing that the proposed $8 million payment by November 2025 does not constitute an immediate clearing of total dues. They acknowledged a previous $450,000 payment from SpiceJet as per a December court order, but noted no further payments.

Simultaneously, SpiceJet is also entangled in legal disputes with other lessors over pending dues.

Engine Lease Finance BV recently moved the high court to restrain SpiceJet from using its engines after talks of an interim settlement in October fell through. In the proposed settlement, SpiceJet had committed to pay over $2 million to the lessor by 25 January and return the leased engines by that date.

Meanwhile, in an internal note to its senior staff on Monday, the airline said it now has a bank balance of more than 900 crore, including 160 crore received as an instalment under the government’s Emergency Credit Line Guarantee Scheme.

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Published: 29 Jan 2024, 03:20 PM IST

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