SpiceJet on Tuesday announced that it has resolved its dispute with Engine Lease Finance Corporation (ELFC) through a settlement. ELFC, which had previously claimed $16.7 million, has agreed to settle for an undisclosed amount, which is lower than the initial claim.
The representatives of both parties will now formalise the settlement agreement, with a view to withdrawing all ongoing litigation and ending disputes between them, the airlines company informed the exchanges.
This settlement marks a significant step in SpiceJet’s ongoing efforts to streamline its operations and focus on future growth.
“We are pleased to have reached a mutually beneficial settlement with ELFC, which enables us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on the next phase of growth and expansion,” said Ajay Singh, Chairman and Managing Director of SpiceJet.
SpiceJet’s shares were trading in the red 1.42 per cent lower at Rs 69.28 apiece on the BSE on Tuesday.
ELFC, SpiceJet’s engine dispute
ELF leased eight engines to SpiceJet. Along with interest and rental, ELF has claimed around $16 million dues.
Earlier, the matter had been listed before a Delhi-based bench of the NCLT.
SpiceJet had then raised objections against ELF’s plea citing technical defects and the tribunal gave the engine lessor an opportunity to rectify the errors. However, when the defects were rectified, the insolvency tribunal issued a notice to the airline.
Headquartered in Shannon, Ireland, ELF is the world’s leading independent engine financing and leasing company.
It entered into an agreement with SpiceJet in 2017 to lease engines. According to the petitioner, the low-budget carrier has defaulted on payments since April 2021.
SpiceJet has contended that there is a pre-existing dispute between them.
SpiceJet’s insolvency history
SpiceJet has faced insolvency petitions from several of its creditors, including Willis Lease, Aircastle Ireland Ltd, Wilmington and Celestial Aviation.
While the NCLT rejected the pleas of Willis Lease Finance and Wilmington Trust, SpiceJet settled the case with Celestial Aviation. Both companies, however, have moved the National Company Law Appellate Tribunal (NCLAT) challenging the dismissal of their insolvency plea by NCLT.
On the other hand, the petitions filed by Aircastle and Alterna Aircraft are pending before the insolvency tribunal.
Meanwhile, the low-cost airline on Saturday announced that its board has approved the issuance and allotment of about 48.71 equity shares to eligible qualified institutional buyers to raise Rs 3,000 crore at an issue price of Rs 61.60 apiece.
