Court adjourns insolvency bid against India's SpiceJet

India's National Company Law Tribunal (NCLT) has again adjourned an insolvency application lodged by Aircastle against SpiceJet. On May 25, the Delhi bench of the NCLT deferred the matter of Aircastle (Ireland) Limited vs SpiceJet Limited to June 1. It was the second adjournment this month.

Claiming SpiceJet owes it INR490 million rupees (USD5.9 million), Aircastle is attempting to have the embattled airline declared insolvent under s.9 of India's Insolvency and Bankruptcy Code (IBC) after talks between the two parties failed to produce a mutually agreeable outcome

On May 8, after Aircastle filed its petition, the NLCT gave SpiceJet nine days to respond to the lessor's claims, setting a May 17 hearing date. The tribunal then adjourned the hearing date to May 25, and now June 1. Separately, India-based outlets report that two other creditors have also filed insolvency petitions against SpiceJet. Construction firm Acres Buildwell Private Ltd filed a fresh insolvency petition against the airline in February after pursuing it for INR32.5 million (USD392,785) last year, and engine supplier Willis Lease Finance filed an insolvency petition against SpiceJet last month.

According to the MoneyControl portal, Aircastle remains unhappy with the offers from SpiceJet to settle the dispute, despite the NCLT urging the parties to reach an agreement. SpiceJet recently agreed to pay a Credit Suisse subsidiary USD500,000 per month to stay yet another lawsuit and pay down a debt related to the supply and maintenance of aircraft engines and parts.

SpiceJet recently received USD50 million from India's Emergency Credit Line Guarantee Scheme (ECLGS) and other sources. The airline is attempting to bring more aircraft back into service and deal with nervous lessors attempting to de-register and re-possess planes. Already this month, lessors have succeeded in de-registering three SpiceJet aircraft. SpiceJet CEO Ajay Singh maintains the carrier will work its way through its present challenges, avoid insolvency, and emerge as a bigger and better airline.