Five aircraft leasing companies based in Ireland take SpiceJet to court

CHENNAI: Just after low-cost airline SpiceJet soared into the skies after a hard landing, it is in a spot of rough weather again.

Five aircraft-leasing entities based in Ireland, which had leased out airplanes to the company, have terminated their agreements and have gone to court to recover dues that they claimed totalled Rs 100 crore. Petitions to have the company wound up, and an official liquidator recover the arrears, have been filed with the Madras High Court.

The matter is expected to come up for hearing on Wednesday.

B&B Air Acquisition, Steddell Ltd, Torodell Ltd, Xavierdell Ltd and Virgodell Ltd had leased aircraft for which basic dues and maintenance rent had stopped coming from November 2013. Though the airline made a part-payment in November last year, mounting dues and failure of repeated negotiations have forced the lessors to take the judicial route.

All of them terminated their leases with SpiceJet in December 2014, and had served notices in January, just about the time the Chennai-based company was in talks with various investors to get the airline back in operations.

Ajay Jasra, general manager for corporate affairs at SpiceJet, told ET that the airline is in discussions with all these entities and that a settlement would be arrived at soon. He added said the carrier is in the process of a fleet restructuring that aims to rationalise costs and adhere to the company’s expansion plans.

This development comes a week after the Delhi High Court ordered de-registration six aircraft chartered by SpiceJet, owing to non-payment of basic rent and supplemental dues. On Monday, SpiceJet announced that it reached a settlement with Irish firm Wilmington Trust SP Services (Dublin).

In a statement to the BSE about plane groundings and mounting dues, Spice-Jet clarified that these payment issues had erupted late last year when drying up of working capital had forced the company cancel flights and seriously hunt for investors.

In a course-altering deal in February, it roped in co-founder Ajay Singh, who bought 58.4 per cent of the company. It recently informed the BSE that the first tranche of recapitalisation has already arrived and that it will begin paying off creditors in a phased manner.