NCLT Issues Notice To SpiceJet On Aircraft Lessor's Insolvency Plea

A two-member Principal bench of the NCLT headed by President Ramalingam Sudhakar issued the notice to SpiceJet and directed to list the matter on May 17 for the next hearing

The National Company Law Tribunal (NCLT) on Monday issued a notice to budget airline SpiceJet on a petition filed by an aircraft lessor seeking initiation of insolvency resolution proceedings against the budget carrier and the next hearing is scheduled for May 17, the PTI reported. The petition was filed by Aircastle (Ireland) Ltd.

According to the PTI report, a two-member Principal bench of the NCLT headed by President Ramalingam Sudhakar issued the notice to SpiceJet and directed to list the matter on May 17 for the next hearing. A SpiceJet spokesperson said that in the Aircastle issue, notice was issued in normal course. "There was no adverse ruling against SpiceJet. The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same," he said.

The latest development also comes at a time when crisis-hit rival Go First has filed for voluntary insolvency resolution proceedings. Aircastle filed the petition against SpiceJet on April 28.

Last week, SpiceJet said there were no aircraft from Aircastle in the airline's fleet and that the filing of the petition will in no way affect its operations. According to the NCLT website, two more petitions for insolvency resolution proceedings against SpiceJet are pending before it.

SpiceJet announced in February that it would reduce its debt by $100 million by allowing Carlyle Aviation Partners to purchase a 7.5 per cent stake in the airline by converting outstanding dues and acquiring a shareholding in the cargo business. The plea by Willis Lease Finance Corporation was filed on April 12 and the one by Acres Buildwell Private Ltd was filed on February 4.

Shares of SpiceJet were trading flat on Monday with Rs 31.79 apiece, down 0.44 per cent on the BSE.

Meanwhile, Go First, which went under citing Pratt & Whitney engine failures, is optimistic about resuming flights within seven days if the bankruptcy court restrains lessors from taking back its aircraft, reported by Bloomberg. Its Chief Executive Officer (CEO) Kaushik Khona said has enough funds to sustain operations on a cash-and-carry model for about 10 days. The airline is also seeking to request for an outstanding emergency credit it is eligible under the government’s programme to offer life-support to pandemic-hit industries, Khona said.