Indian airline SpiceJet tells court it is 'struggling to stay afloat'

Spicejet

24/08/2023 12:02

By Arpan  Chaturvedi
       NEW DELHI, Aug 24 (Reuters) - Indian budget airline
SpiceJet  SPJT.BO  told a court on Thursday it was "struggling
to stay afloat", as it was ordered to make a payment to its
former owner over money owed.
    In 2018 SpiceJet lost an arbitration case arising out of
share transfers from former owner Kalanithi Maran to the
company's new management in 2015, making the airline liable to
pay $70 million plus interest. Maran later took SpiceJet to
court saying he was still owed $48 million. 
    In a Delhi High Court hearing on Thursday on Maran's case
demanding the dues, SpiceJet said it was struggling financially.
    "We are struggling to stay afloat," the airline's lawyer
Amit Sibal told the judge. 
    SpiceJet offered to deposit 750 million rupees ($9.08
million) within 10 days, but the judge ordered the airline to
pay 1 billion rupees ($12 million) by Sept. 10 and warned it
could consider seizing the company's assets to recover the dues,
if it fails to comply.
    SpiceJet said in a statement it would honour the court order
and "make the specified payment within the prescribed
timeframe."
    The order comes days after India's Supreme Court, in a
separate case, asked SpiceJet's Managing Director Ajay Singh to
appear in court and defend allegations by Credit Suisse claiming
certain unpaid dues. 
    Both the Delhi High Court case and the Supreme Court case
will next be heard on Sept. 11.
    SpiceJet this month reported its highest quarterly profit in
four years, helped by a sharp drop in expenses due to fewer
flights operated. SpiceJet has also been scrambling to raise
funds and restore operations for about a fourth of its fleet,
which has been grounded amid battles with its lessors over
payments, as competition heats up fiercely in the sector.
    While India's biggest carrier IndiGo and Tata group-owned
Air India have hundreds of new planes on order, another budget
airline, Go First, filed for bankruptcy in May.


($1 = 82.5590 Indian rupees)

 (Reporting by Arpan Chaturvedi; Editing by Susan Fenton)
 ((Arpan.Chaturvedi@thomsonreuters.com;))