SpiceJet faces new bankruptcy case filed by software solutions startup Techjockey

New Delhi: Software solutions startup Techjockey Infotech Pvt. Ltd has filed bankruptcy proceedings against cash-strapped airline SpiceJet, accusing it of breach of contract $1.18 million rupees.

The National Company Law Tribunal (NCLT) admitted the plea and issued notice to SpiceJet. The case is scheduled to go to trial in November.

The insolvency plea filed under Section 9 of the Insolvency and Bankruptcy Code (IBC) seeks to initiate insolvency proceedings against the airline over defaults arising from SpiceJet’s 2021 agreement to acquire cloud services.

According to Techjockey’s lawyers, the company sent several invoices and made demands for payment, but SpiceJet did not respond, prompting it to file for bankruptcy.

The case adds to the list of cases filed against SpiceJet for bankruptcy due to non-payment of dues to various suppliers and aircraft lessors. However, to date, none of these requests have resulted in insolvency proceedings against the airline. Some of them have been dismissed by the NCLT, others have been withdrawn after settlement and some are still awaiting a final decision.

Parties bringing various insolvency cases include Wilmington Trust SP Services (Dublin), Willis Lease Finance, Celestial Aviation, Aircastle and Alterna Aircraft. Three entities (AWAS 36698 Ireland, AWAS 36694 Ireland and AWAS 36695) have also filed lawsuits, as well as Shannon Engine Support Limited, Engine Lease Finance BV and Raymach Technologies Pvt.

NCLT rejected the pleas of Willis Lease Finance and Wilmington Trust SP, while SpiceJet settled with Celestial Aviation, Alterna Aircraft and Raymach Technologies Pvt., all of which withdrew their cases against the airline.

Requests are still pending from Aircastle, AWAS 36698 Ireland, AWAS 36694 Ireland and AWAS 36695 as well as Shannon Engine Support Limited and Engine Lease Finance BV

Wilmington Trust and Willis Lease Finance have approached the National Company Law Appellate Tribunal (NCLAT) challenging the NCLT’s dismissal of their bankruptcy petitions.

Spicejet’s QIP Plan

SpiceJet said on Monday it has raised funds $Rs 3,000 crore was raised through a qualified institutional placement (QIP), which started on September 16 and closed on September 18. The airline reported an overwhelming response from qualified investors and was significantly oversubscribed, reflecting strong confidence in the company’s growth prospects.

SpiceJet claims that the diverse presence of top institutional investors and mutual funds has reaffirmed the market’s confidence in SpiceJet’s ability to address industry challenges and capitalize on the growing demand in the aviation industry.

Notable global investors include Goldman Sachs (Singapore), Morgan Stanley Asia, BNP Paribas Financial Markets ODI, Nomura Singapore Ltd. ODI, Tata Mutual Funds, Discovery Global Opportunity Ltd, Societe Generale ODI, Authum Investment and Infrastructure Limited , Bandhan Infrastructure Fund, White Oak, Carnelian Bharat Amrikaal Fund, 360 ONE Equal Opportunities Fund and Jupiter Global Fund.

Also read: SpiceJet’s road to recovery: A tough, long climb to regain market share

According to the airline, in addition to $SpiceJet raises Rs 3,000 crore through QIP, will get additional $The last funding round raised Rs 736 crore, further boosting its financial stability and growth plans.

“The strong response from investors and institutions is testament to their confidence in SpiceJet’s potential to scale rapidly and become a strong player in India’s booming aviation market. This fundraise marks a pivotal moment for SpiceJet as we look to grow in aviation business to reach new heights,” said Ajay Singh, Chairman and Managing Director of the airline.

The fresh funds raised by SpiceJet will be crucial in helping the airline overcome its financial woes and reach a settlement with various creditors, mainly lessors, involved in ongoing litigation with the NCLT, Delhi High Court and Supreme Court over unpaid dues. Recent court orders requiring the grounding of leased engines and aircraft in exchange for these unpaid fees have caused mounting trouble for airlines.

The Supreme Court on Friday dismissed SpiceJet’s plea against a Delhi High Court order requiring the airline to ground three engines leased from Team France 01 SAS and Sunbird France 02 SAS over non-payment of dues, forcing The airline grounded the engines.

According to media reports, SpiceJet CMD Ajay Singh claimed that the airline aims to increase its fleet to 100 aircraft by 2026. Singh said SpiceJet plans to quickly restore its 36 aircraft that have been grounded due to lack of spare parts.

The airline expects to have a fleet of 40 aircraft by March 2025, comparable to Akasa Air’s, with plans to add another 40 aircraft thereafter.

SpiceJet shares soared 10% on Monday, hitting a new intraday high $After the QIP news broke, the BSE share price was 72.8 shares.

Mint explainer: Why SpiceJet struggles to release financial results on time