India's Supreme Court has ordered SpiceJet (SG, Delhi International) to pay Credit Suisse USD1 million per month for the next six months before reverting to USD500,000 monthly payments to settle a longstanding MRO debt.
"The Supreme Court has acknowledged our compliance with its previous orders and concurred with our proposal to settle the USD3 million arrears over the forthcoming six months," a SpiceJet statement reads. "This represents a positive outcome for the company and our stakeholders, and we extend our gratitude to the Court for its understanding. We are dedicated to paying our dues in full and on time. "We are strongly committed to maintaining the highest standards of compliance and look forward to continuing our positive dialogue with all parties involved."
Early last week, SpiceJet paid Credit Suisse USD1.5 million after Supreme Court judges threatened to send its chairman and managing director Ajay Singh to jail for not complying with court orders.
The matter concerned a 10-year aircraft servicing and maintenance contract SpiceJet entered into with SR Technics in late 2011. SpiceJet initially provided bills of exchange to cover issued invoices. However, in 2012, SR Technics gave the rights to collect payments to Credit Suisse. SpiceJet failed to pay a series of invoices, accumulating approximately USD24 million in debts and leading Credit Suisse to file a winding-up petition against the airline in 2021.
In December 2021, a single-judge bench of the Madras High Court ordered the winding-up of SpiceJet under Section 433 (e) of the Companies Act 195 and the appointment of a liquidator. This set off a series of appeals from SpiceJet, who eventually found themselves before the Supreme Court. That court gave the airline three weeks to settle the matter or face liquidation. As a result of negotiations, SpiceJet agreed to start paying down the debt at a rate of USD500,000 per month, with the Supreme Court ratifying the deal in May 2022.
However, SpiceJet went on to miss multiple monthly payments. As of August 2023, it had paid USD2 million out of a owed USD6.5 million. In March this year, Credit Suisse went back to court to attempt to have the payment order enforced. In addition, the financial insititutution sought to have contempt of court charges filed against SpiceJet's chairman and managing director, Ajay Singh. Early last week, SpiceJet paid Credit Suisse USD1.5 million after Supreme Court judges threatened to send its Singh to jail for not complying with court orders.
Per the terms of the May 2022 agreement, SpiceJet remains USD3 million in arrears. The matter returns to court on October 20, with SpiceJet's chairman and managing director ordered to appear in person.
