SpiceJet, a prominent budget airline, has successfully settled a long-standing dispute worth Rs 250 crore with Celestial Aviation, a subsidiary of a major aircraft lessor group. The resolution was achieved through negotiations, averting the need for litigation, as per an official communication to the stock exchanges.
The settlement, set to be formally withdrawn on March 1, has been communicated to the National Company Law Tribunal (NCLT) bench by both parties involved. Just two days before, SpiceJet had informed the NCLT that the dispute with Celestial Aviation was virtually resolved, pending only formalities.
Ajay Singh, chairman and managing director of SpiceJet, expressed gratitude for stakeholders’ support during the process, highlighting the resolution’s significance in enabling the airline to refocus on fleet revitalisation and business advancement.
Furthermore, SpiceJet disclosed its recent successful capital raise of Rs 1,060 crore through a preferential issue, attracting notable investors such as Aries Opportunities Fund Limited and Elara India Opportunities Fund Limited. Part of these funds will be allocated towards settling past liabilities, including the resolved dispute with Celestial Aviation.
This settlement follows SpiceJet’s strategic decision in October 2023 to explore settlement possibilities with Celestial Aviation, with subsequent partial payments made by SpiceJet to the aircraft lessor in December 2023. Although the airline missed some deadlines, Celestial Aviation’s counsel, Nitin Sarin, acknowledged receiving the payments.
Amidst these developments, SpiceJet reported a remarkable 160 per cent surge in its consolidated net profit, amounting to Rs 110 crore, for the December quarter, reflecting the airline’s positive trajectory despite ongoing challenges in the aviation sector.
The airline last week raised secure additional funds worth Rs 316 crore. This raises the airlines’ total funds to Rs 1,060 crore via a preferential share issue. This inflow of fresh capital into the struggling airline coincides with its recent announcement of reducing its workforce by 10 to 15 per cent.
Shares of SpiecJet closed at Rs 64.62 apiece, on the BSE on Wednesday.
ALSO READ | Reliance Capital Shares Set To Be Delisted From Stock Exchanges