Business

Madras HC allows lessors to issue notice to SpiceJet on winding up petitions

The Madras High Court today ordered the issuance of a notice to Spicejet on winding up petitions filed by five leasing companies. The lessors have claimed that the airline owe Rs 80 crore to them.

The companies, which have filed the petitions, includes B&B Air Acquisitions Leasing Ltd, Steddel Ltd, Torodell Ltd, Xavier Dell Ltd and Virgodell Ltd.

The Petitions were accepted by the Madras High Court today and has ordered issuance of notice to Spicejet, said Advocate L Maithili of L Maithili and Associates who appeared for the leasing firms.

The leasing companies claim that despite the termination of the agreement in December and the issuance of a statutory notice in January, SpiceJet has not yet replied.

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In a statement on Wednesday, SpiceJet said that there is actually only one lessor – BBAM – with 5 aircraft; each one leased through a separate special purpose vehicle (SPV). Further SpiceJet has not yet received any notice whatsoever, from the Madras High Court on this matter.

“We reiterate that discussions have been ongoing with the lessors for an amicable settlement. SpiceJet fully expects the matter will be resolved shortly and positively with the lessors, and there will be no grounding of aircraft or disruption of operations. Our operations are normal with on-time performance now amongst the top 2 in the domestic market,” it said in the Statement.

Early this week, SpiceJet said that it had resolved a dispute with one of the two lessors, which had moved the Delhi High Court against it and secured an order for de-registration of six Boeing 737 aircraft. The airline said it had entered into an agreement with Wilmington Trust SP Services (Dublin) Limited, which has links to leasing company BOC Aviation, from which it had leased three aircraft.

The agreement eased concern over a Delhi court order last week, seeking to return six of SpiceJet’s 18 Boeing 737 planes to lessors who owed money.

It may be noted that in January, 2015, the then promoter of SpiceJet, Kalanithi Maran announced his plans to sell shares to Ajay Singh, the former promoter of the low cost airline. As per the agreement, Singh has to infuse Rs 1,500 crore into the airline in three tranches and the ownership would be transfered to him, through transfering the 58 per cent stake of Maran and his company Kal Airways to Singh. As per reports, the ownership transfer was completed in February. According to the company, some of these cases had emerged when the airline was in financial crisis in December 2014, before change of ownership and the infusion of fresh funding.

“SpiceJet would like to assure its partners and customers that the situation of the airline is very different from what it was in late 2014, and that it has received its first tranche of funding already and is in the process of paying off creditors in a phased manner,” the company said in a release on March 20, 2015.

“The change of ownership and infusion of fresh funding has assured SpiceJet’s future, and our creditors are aware and appreciative that the best outcome for all parties would be a fully revived and healthy SpiceJet, and are working jointly towards that outcome,” it said.