SpiceJet Shares Zoom Over 4% As Airlines Pays $1.5 Million To Credit Suisse

Earlier this week, the SC issued a strong warning to the Chairman and Managing Director (CMD) of SpiceJet Ajay Singh regarding his failure to fulfill financial obligations owed to Credit Suisse AG

SpiceJet has paid $1.5 million to Credit Suisse complying with the Supreme Court directive, the company said in an exchange filing. Following the announcement, shares of Gurugra, based airline jumped over 4 per cent. 

"SpiceJet Ltd. has complied with the directive of the Supreme Court by remitting $1.5 million to Credit Suisse. The payment was executed on Thursday, September 14," the exchange filing said. 

Earlier this week, the SC issued a strong warning to Ajay Singh, the Chairman and Managing Director (CMD) of SpiceJet, regarding his failure to fulfill financial obligations owed to the global investment bank Credit Suisse AG. According to reports, the Supreme Court had cautioned him that non-compliance with its directive to make payments to Credit Suisse AG could result in him being thrown in Tihar jail. The court had instructed Singh to remit $500,000 as part of an installment to the Swiss firm, in addition to a defaulted amount of $1 million.

In a statement on Tuesday, the airline said, "SpiceJet acknowledges the legal process and is committed to complying with all court's directives and obligations in the Credit Suisse case and will make the payment of $1.5 million as per the court directive. Till date, SpiceJet has already paid a total of $8 million to Credit Suisse."

"SpiceJet remains committed to the highest standards of transparency and legal compliance. This liability is an old one and predates the current promoter taking over the company," it had said.

In April 2023, Credit Suisse, a Swiss bank, initiated contempt of court proceedings against SpiceJet in the Supreme Court after the airline failed to adhere to a SC-approved settlement plan for settling outstanding dues.

The dispute between SpiceJet and Credit Suisse stemmed from SpiceJet's failure to make payments to SR Technics, a Switzerland-based aircraft maintenance service provider, resulting in unpaid dues totaling $20 million. This dispute had led to the Madras High Court ordering the winding up of SpiceJet. However, the Supreme Court intervened and suspended the Madras High Court's order, urging the parties to reach a settlement.

During the court proceedings, the Supreme Court verbally noted that SpiceJet's Chairman and Managing Director, Ajay Singh, was in clear contempt of court for not complying with the terms of the May 2022 settlement order.

On August 14, the Supreme Court issued a contempt notice to Singh based on a petition filed by Credit Suisse, accusing the financially strained airline of failing to abide by a court-approved settlement plan for the payment of outstanding dues. 

In the midst of these legal proceedings, on September 12, the low-cost airline announced that it had paid Rs 100 crore to Kalanithi Maran, the Sun Group chairman and former promoter of the airline, in accordance with the Delhi High Court's direction related to an arbitral award.

On Friday, shares of SpiceJet closed over Rs 38 per share up 0.42 per cent from the last closing.