SpiceJet (SG, Delhi International) has admitted to an Indian court that it is "struggling to stay afloat." The low-cost carrier's counsel, Amit Sibal, made the admission during a August 24 Delhi High Court hearing in the matter of Kal Airways Pvt. Ltd. vs. Spicejet Ltd. & Anr.
The airline and its promoter, Ajay Singh, requiring it to pay INR3.79 billion Indian rupees (USD48.1 million) to former majority owner Kalanithi Maran and his associated entity, Kal Airways. The debt, relating to promised share transfers connected to the 2015 ownership change, has been in and out of the Indian courts since 2018 but now appears to be approaching finality. On July 31, the High Court refused to interfere with previous payment directions and gave SpiceJet and Singh until September 10 to pay at least INR1 billion (USD12.1 million) or risk asset seizure and Singh risk arrest.
On August 24, Justices Yashwant Verma and Justice Dharmesh Sharma promptly dealt with a s.37 appeal from SpiceJet and Singh. Sibal argued that the July 31 order was invalid because it was heard by a single judge, rather than a panel of judges. Sibal asked that the July order be overturned. However, Verma and Sharma declined to do this, saying there were no issues with the matter going before a single judge.
In response, Sibal submitted an offer to pay INR750 million (USD9.01 million) by the September deadline, a request the judges also rejected, saying SpiceJet must pay the full INR1 billion. Sibal said the airline's financial challenges were behind the reduced offer. However, after the ruling, the airline later said it would "make the specified payment within the prescribed timeframe."
Appearing for Maran, Maininder Singh told the court that SpiceJet had voided its right to make any further applications, given its disregard towards previous orders. Last week, SpiceJet also announced a second-quarter profit of INR1.98 billion (USD23.9 million). However, the profit only goes some way to relieving the carrier's financial issues. In court, an unrelenting Singh asked that the entire amount be handed to his client, plus any future profits, if the July order was not abided by. However, there is no indication that the court immediately agreed to this proposal.
In yet another court appearance related to the matter earlier this month, where Maran's counsel sought an order for SpiceJet to begin paying him 50% of their weekly revenues to start paying off the debt, the court ordered both SpiceJet and Singh to file an affidavit of assets and liabilities by the end of August. However, neither party has confirmed this has occurred yet, and SpiceJet has previously ignored similar orders. The matter is next due in court on September 11.
That day will be a busy one for SpiceJet's lawyers, with a separate action initiated by Credit Suisse also scheduled at the Supreme Court. That court has ordered Ajay Singh to appear in person on the day. In addition to a payment order to cover MRO debts, Credit Suisse is attempting to have Singh face contempt of court charges for disregarding previous court and tribunal orders.
Separate to these matters, other creditors with legal and insolvency proceedings underway against SpiceJet include Wilmington Trust SP Services (Dublin), Willis Lease Finance, Aircastle, and Celestial Aviation Services Limited.
