SpiceJet shares gain 3% despite Delhi HC upholding grounding of leased engines

The stock has surged 13 percent over the past three months

SpiceJet's shares rose by 3 percent to Rs 65 each, even as the Delhi High Court's division bench upheld a previous ruling grounding three engines leased from two French companies. The dispute is over unpaid dues owed to the lessors, Team France 01 SAS and Sunbird France 02 SAS.

According to court filings, the French lessors claim SpiceJet has over $20 million in unpaid dues, accumulated over more than two years. The case was filed in December, demanding both payment and repossession of the leased engines.

The court urged SpiceJet to consider settling the matter with the lessors and stated it would not overturn the previous order grounding the engines. Despite this, SpiceJet assured in a media statement that its operations will remain unaffected.

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Currently, SpiceJet’s total outstanding liabilities amount to Rs 3,700 crore, owed to lessors, engineering vendors, and suppliers. The airline also has Rs 650 crore in unpaid statutory dues, as per its investor presentation.

The airline's operational fleet has significantly decreased from 74 aircraft in 2019 to just 28 in 2024, with 36 planes grounded due to payment and funding issues. Additionally, rising costs such as working capital expenses and airport rentals have worsened its financial struggles.

In response, SpiceJet is planning to raise Rs 2,500 crore through a qualified institutional placement, along with Rs 736 crore from warrants and promoter funds, to unground aircraft, settle liabilities, and acquire new planes.

Despite reporting a 20 percent drop in net profit for the June quarter and a 15 percent year-on-year decline in revenue, the stock has surged 13 percent over the past three months, outperforming the Nifty 50's 7 percent gain.

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