Aircastle withdraws bankruptcy case against SpiceJet after paying $5.6 million

New Delhi: Ireland-based aircraft lessor Aircastle has breathed a sigh of relief to SpiceJet by withdrawing its bankruptcy case against the budget airline after reaching a $5.6 million settlement.

Both parties informed the National Company Law Tribunal (NCLT) in Delhi about the settlement on Wednesday, after which the court approved the withdrawal of the case.

This is another example of the airline resolving disputes with creditors after raising funds. $3,000 crore through Qualified Institutional Placement (QIP).

In October, the airline announced it had settled a $23.39 million dispute with Aircastle (Ireland) Designated Activity Co. and Wilmington Trust SP Services (Dublin) Ltd. The matter was settled for $5 million and an agreement was reached regarding the handling of certain activities. Aircraft engine.

Aircastle was one of the first lessors to file insolvency pleas against SpiceJet in 2023 over rent arrears, as the airline faces a growing list of insolvency claims from lessors and suppliers in the Delhi bankruptcy court.

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

SpiceJet disputes with lessors and suppliers

On Oct. 9, the airline completed a $22.5 million deal with Horizon Aviation 1 Ltd., Horizon II Aviation 3 Ltd. and Horizon III Aviation 2 Ltd, managed by Babcock & Brown Aircraft Management .Settled $131.85 million in claims.

SpiceJet reached a settlement with Engine Lease Finance Corp. on Sept. 24, reducing its original dues of $16.7 million.

SpiceJet reached settlements with Celestial Aviation, Alterna Aircraft and Raymach Technologies. Despite the settlement, SpiceJet still faces bankruptcy claims.

Last week, NCLT issued a notice to the airline on a complaint filed by lessors Sabarmati Aviation and JetAir 17. On October 24, Falgu Aviation Leasing Ltd filed another bankruptcy complaint over $8.1 million in arrears ( $68 Crores).

However, it is worth noting that to date, none of these claims have resulted in SpiceJet entering any insolvency proceedings. Many were withdrawn after settlement, some were fired, and some are still pending.

Additionally, SpiceJet is ready to receive $The last funding round raised Rs 736 crore, further enhancing its financial stability and growth prospects.

The fresh funds will be crucial for SpiceJet to resolve its financial challenges and settle its debts with various creditors, especially lessors involved in the ongoing litigation with NCLT, Delhi High Court and Supreme Court over unpaid dues.

The airline’s difficulties have been compounded by recent court orders forcing the grounding of leased engines and aircraft due to these unpaid fees.

According to media reports, SpiceJet’s CMD Ajay Singh said that the airline aims to expand its fleet size to 100 aircraft by 2026.

Singh said SpiceJet plans to quickly revive its 36 grounded aircraft, which are currently out of service due to lack of spare parts. The airline expects to have a fleet of 40 aircraft by March 2025, matching Akasa Air’s fleet, with plans to add another 40 aircraft thereafter.

Also read: Mint Quick Edit Will SpiceJet’s funding boost keep it in the air?