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Low-cost carrier SpiceJet on Tuesday said it has resolved its dispute with Engine Lease Finance Corporation (ELFC) by settling the dispute with an amicable settlement of a claim worth $16.7 million. ELFC had previously claimed $16.7 million. The airline said ELFC has agreed to settle for an undisclosed amount, which is lower than the initial claim.
Ajay Singh, Chairman and Managing Director of SpiceJet, said, the mutually beneficial settlement with ELFC not only resolves past issues but also strengthens its position as it embarks on the next phase of growth and expansion.
The airline said in a regulatory filing: “The representatives of both parties will now formalise the settlement agreement, with a view to withdrawing all ongoing litigation and ending disputes between them.”
It added that the settlement marks a significant step in SpiceJet’s ongoing efforts to streamline its operations and focus on future growth.
ELF entered into a leasing agreement with SpiceJet for eight engines. ELF has asserted that SpiceJet owes approximately $16 million in dues, including interest and rental fees.
The case was brought before a bench of the NCLT based in Delhi, where SpiceJet initially objected to ELF’s claim due to technical issues. The tribunal granted ELF the chance to address these errors. After the errors were corrected, the insolvency tribunal issued a notice to the airline.
Earlier, SpiceJet raised Rs 3,000 crore through its Qualified Institutional Placement (QIP). The QIP attracted a diverse pool of top-tier institutional investors and mutual funds.
SpiceJet recently QIP has greatly strengthened the company’s financial position. The capital generated from this placement is designated for several key objectives, such as addressing previous financial obligations, expanding operations, and improving the airline’s aircraft fleet and services. Following the implementation of the QIP and the resolution of significant disputes, SpiceJet is now strategically positioned for substantial growth in the future, according to an official statement issued by the company.
SpiceJet faced insolvency petitions from various creditors like Willis Lease, Aircastle Ireland Ltd, Wilmington, and Celestial Aviation. After the National Company Law Tribunal (NCLT) dismissed the petitions from Willis Lease Finance and Wilmington Trust, SpiceJet reached an agreement with Celestial Aviation. Nevertheless, both entities have appealed the NCLT’s decision by approaching the National Company Law Appellate Tribunal (NCLAT).
Meanwhile, the insolvency tribunal is yet to pass a judgment on the insolvency petitions submitted by Aircastle and Alterna Aircraft.
On Saturday, SpiceJet revealed that its board has given the green light for the issuance and allocation of approximately 48.71 equity shares to eligible qualified institutional buyers. This move aims to raise Rs 3,000 crore at an issue price of Rs 61.60 per share.
“The QIP attracted a diverse pool of top-tier institutional investors and mutual funds, reaffirming the market’s belief in SpiceJet’s ability to navigate industry challenges and capitalise on the growing demand in the aviation sector,” the airline said.