SpiceJet Faces Delhi HC Order to Pay $4 Million to Engine Lessors

In a recent development, the Delhi High Court has directed budget airline SpiceJet to settle a $4 million payment to its engine lessors, Team France 01 SA and Sunbird France 02 SAS, by February 15. SpiceJet, facing an obligation to pay a total of $11 million to the lessors, has requested additional time for payment, proposing an initial payment of $1 million with the remaining amount to be paid in a staggered manner.

SpiceJet revealed that out of the four engines in question, three have already been returned, and only one remains in use. The lessors, frustrated by what they perceive as a lack of substantial payments, have requested the grounding of the aircraft. They have stated that they have given the carrier a considerable amount of time, and if there is a default, they insist on a ten-day window for the engine to be grounded.

The airline informed the court that it has received the first tranche of $90 million and expects the next tranche of $4 billion in cash shortly. The case is scheduled for the next hearing on February 22, 2024.

In its effort to address financial challenges, SpiceJet recently completed raising approximately Rs 744 crore through the allotment of shares and warrants as part of its refinancing plan. This move is part of the funding strategy announced in December, where the airline's board approved raising fresh capital of Rs 2,250 crore from various entities, including financial institutions, foreign institutional investors, and high-net-worth individuals. Additionally, SpiceJet managed to secure Rs 160 crore through the Emergency Credit Line Guarantee Scheme (ECLGS), according to news reports citing sources. Within three months, the airline reportedly obtained funding exceeding Rs 1,100 crore.

Despite its financial struggles, SpiceJet has expressed interest in participating in the bidding process for the insolvent Go First. The airline plans to seek additional funds to fortify its financial position. Presently, SpiceJet operates a fleet of approximately 40 aircraft.

A spokesperson for SpiceJet commented, "The Company is in constant discussion with the Team to settle the matter and has also provided a payment plan for the same, which is pending consideration. We are confident of resolving the matter.