At least one lessor has rejected a bid by SpiceJet (SG, Delhi International) to settle its debts by issuing shares in lieu. India's Economic Times reports that Aircastle has said no to a debt-for-equity swap offer from the beleaguered airline. This comes as a Delhi court threatened to jail SpiceJet's chairman earlier this week over the non-payment of debts.
The report states that SpiceJet has approached several lessors, including some who have commenced insolvency proceedings against the airline, with the offer. So far, only Carlyle Aviation Partners has agreed to swap its debt for a shareholding in the airline. SpiceJet's shareholders recently approved a proposal to allocate nine Aircastle-controlled special purpose leasing vehicles preferential shares worth INR2.31 billion Indian rupees (USD27.9 million) to settle outstanding debts.
"We are in continuous discussions with all lessors, including Aircastle, for settlement," a SpiceJet spokesperson told the newspaper. "We have successfully closed it with out largest lessor and partner (Aircastle), and are hopeful of doing so with others." The spokesperson added that some of the lessor's claims are "disputed and highly exaggerated."
Aircastle has been running two insolvency cases against SpiceJet in India's National Company Law Tribunal (NCLT), with its legal representative previously telling the tribunal that SpiceJet had defaulted on multiple contracts covering different aircraft and different invoices. The airline, which has robustly defended the matter in court and attempted to have it dismissed, is reported to owe the lessor USD5.9 million. Aircastle declined to comment on the matter to ch-aviation.
Engine lessor Willis Lease Finance is also pursuing SpiceJet in the NCLT, with the airline owing it USD6.87 million. CEO Austin Willis previously told ch-aviation that SpiceJet had "routinely failed to live up to their promises in the leases and beyond." Another lessor, Celestial Aviation Services, also started insolvency proceedings against SpiceJet last month, saying it was owed USD29.9 million from nine aircraft leases. Finally, Wilmington Trust SP Services (Dublin) is also attempting to have SpiceJet declared insolvent via NCLT proceedings. ch-aviation has approached these lessors for their response to any debt-for-equity swap offer from SpiceJet
Separately, two judges have threatened to jail SpiceJet Chairman and Managing Director Ajay Singh if his airline does not start making payments to yet another creditor. On September 11, Supreme Court Justices Vikram Nath and Ahsanuddin Amanullah ordered Singh to pay Credit Suisse AG USD1.5 million by September 22 or face a spell in an Indian prison.
"We have to move to the next drastic step," said the judges. "We are not worried if you shut down. Enough of this dilly-dally business." Credit Suisse and SpiceJet had negotiated a payment plan to settle a USD24 million MRO debt dating from early last decade. However, SpiceJet quickly fell behind in making the USD500,000 monthly repayments and was USD6.5 million in arrears by March 2023. At that point, Credit Suisse relaunched legal proceedings over the unpaid debt and also attempted to have contempt of court charges brought against Singh.
In court this week, the judges ordered Singh to pay the next USD500,000 instalment and USD1 million in arrears by the deadline later this month, saying he would be sent to Tihar jail if the payment wasn't made. The court also ordered that Singh appear in person each time this matter is scheduled to be heard.
