NCLT Orders SpiceJet to File Response & Explore Options for Settlement

NCLT Orders SpiceJet to File Response & Explore Options for Settlement

The National Company Law Tribunal (NCLT), Delhi bench, has asked the SpiceJet airline to file response to the insolvency plea moved by the Aircastle and explore options for settlement.

The Ireland-based Aircastle, one of budget airline SpiceJet’s lessors, has contended before the Tribunal that the airline’s settlement offer was ‘not good enough.’

The NCLT has listed Aircastle’s insolvency plea against SpiceJet on 25th May.

Aircastle, one of the lessors of SpiceJet, had filed a case at the NCLT seeking initiation of an insolvency process against the airline for non-payments of dues.

The case has been filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, which allows an operational creditor, which has not received payment from the corporate debtor, to file a case with NCLT to initiate a corporate insolvency resolution process, (CIRP).

Aircastle argued that the discussions exchanged with SpiceJet over missed payments were inconclusive. The airline owes Aircastle around $6 million.

The Indian carrier has been struggling to raise funds amid a string of quarterly losses and as local competition heats up. Last week it was announced that, it had begun to revive 25 of its grounded fleet using its own money and a $50 million line of credit through an Indian government scheme.

Aircastle’s plea comes after lessors of the airline submitted requests to the civil aviation regulator Directorate General of Civil Aviation (DGCA) to deregister three aircraft out of the airline’s fleet. All three planes belong to SMBC Aviation Capital, one of the SpiceJet’s many lessors. The aircraft are being held under different portfolios but all of them belong to SMBC.

Other lessors who sought deregistration of SpiceJet’s aircraft were Wilmington Trust SP Services, Sabarmati Aviation Leasing, and Falgu Aviation Leasing.