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New Delhi:
The Delhi High Court ordered low-cost airline SpiceJet to pay $4 million to France 01 SAS and Sunbird France 02 SAS, two lessors that provide engines for its aircraft.
During the hearing, the lessees informed the court that SpiceJet had made a proposal to settle the dispute, which was not acceptable to them. They now want to file a case against SpiceJet.
The lessors also urged the court to stop SpiceJet from using three of their engines.
Fixing the next hearing on February 21, the court warned SpiceJet that in case of non-compliance of the order, instructions could be given to shut down the engines.
Apart from Rs 744 crore, SpiceJet has also secured Rs 160 crore through the Emergency Credit Line Guarantee Scheme (ECLGS) with adequate bank balance of Rs 900 crore, an airline source told IANS on Monday.
Last week, SpiceJet had allotted shares and warrants totaling Rs 744 crore in the first tranche. This decision was taken by the company’s board of directors on January 25, which is an important step towards strengthening the financial position of SpiceJet.
The source further said that the airline’s CMD Ajay Singh will personally monitor all major expenses.
Every rupee will be carefully scrutinized, sources said, with no expenditure allowed without approval. Singh made it clear that underperformers will face significant challenges at SpiceJet.
An airline official said that with the fund infusion, the company will focus on fleet upgrades, enhancing on-time performance and putting customers first.
In addition, a series of cost-cutting measures will be implemented to streamline operations and increase efficiency. The company hopes to raise sufficient capital for financing.
SpiceJet has to complete another tranche of equity/warrants raising from the remaining subscribers and has requested additional time from the competent authority to complete the process under the existing preferential issue, as approved by the shareholders of the company on January 10, 2024. Was approved.
The extension has become necessary due to limited banking days arising from long weekends during the intervening period.
In December 2023, the High Court had asked SpiceJet to pay $450,000 to lessors within two weeks. The airline made this payment, but the lessors demanded further settlements due to a total of $12.9 million over two years.
Earlier this month, the court had allowed SpiceJet’s lessor Engine Lease Finance BV to conduct inspections on the engines leased to the airline.
The airline has been directed to maintain status quo with respect to engines.
The directive came in response to allegations by the lessor that SpiceJet had tampered with parts of the leased engines.
The court was informed that despite SpiceJet’s commitment to shut down the engine on January 15, the airline continued to use it.
SpiceJet’s counsel had assured the court that the airline would immediately shut down the engines and submit a comprehensive response to address all the allegations raised by the lessor.
Earlier, the court was informed that Engine Lease Finance Corporation Aviation Services Ltd and cash-strapped SpiceJet airline have reached an interim agreement.
During the hearing, legal representatives from both sides informed the court that the terms of the settlement had been agreed upon and both legal teams requested an adjournment.
The court had granted adjournment, fixing the hearing of the case on February 8.
Under the agreement, SpiceJet was to pay more than $2 million to Engine Lease Finance BV by January. Additionally, SpiceJet has committed to return the disputed engine by January 25.
If SpiceJet fails to meet these obligations, Engine Lease Finance BV reserves the right to pursue termination and take legal action.
On September 27, Engine Lease BV had taken the case to the Delhi High Court, demanding the return of the only remaining engine. The lessor initially leased nine engines to the carrier and as per the terms of the lease agreement, eight engines were returned upon termination of the agreement.
During the previous hearing, senior advocate Rajasekhar Rao and advocate Anand Venkataramani, representing the engine lease, had requested the court to bar SpiceJet from using the engine. The agreement clearly states that the airline is not authorized to continue using the engine after the lease expires.
Disclaimer: This is news published directly from IANS news feed. With this, the News Nation team has not done any editing of any kind. In such a situation, any responsibility regarding the related news will be on the news agency only.
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