The Delhi High Court was on October 16 informed that Engine Lease Finance BV and low-cost airline SpiceJet have arrived at an interim settlement. The engine lessor has agreed not to pursue the stay application against SpiceJet for now.
According to the terms of the settlement, SpiceJet must pay over $2 million to Engine Lease finance by January. SpiceJet has also undertaken to return the engine which is the bone of contention by January 25. However, the Engine lessor will not revoke the termination and is at liberty to approach the court if SpiceJet does not comply with these undertakings.
On October 5, Delhi HC gave SpiceJet time till October 16 to settle the dispute and noted that it would restrain the airline from using the engine if no settlement is arrived at.
On September 27, Engine Lease Finance told the court that the firm terminated its lease with SpiceJet and the airline had returned eight of its nine engines. As per the agreement, the airline cannot continue using the engine once the lease is terminated. The lessor sought the court's order to restrain SpiceJet
The judge issued a notice to SpiceJet and the case is likely to come up for hearing on October 6.
Engine Lease Finance Corporation was represented by Senior advocate Rajshekar Rao and lawyer Anandh Venkatramani who were briefed by Tuli & Co's partner Saket Satapathy.
Engine Lease Finance is also a lessor to the grounded airline Go First. It is fighting Go First at the National Company Law Tribunal (NCLT) to be exempted from the insolvency process, as it terminated the leases before the order for the moratorium was passed.
SpiceJet and lessors
Four aircraft lessors have filed five insolvency pleas against SpiceJet in 2023 for the non-payment of dues.
Aircastle Ireland Ltd, Willis Lease Corporation, Wilmington and Celestial filed petitions, asking NCLT to admit SpiceJet to the insolvency process to enable them to recover their dues.
While the NCLT has issued notice only in Aircastle's first plea, it has been urging the airline to settle with the lessors. In August, SpiceJet allotted over 48 million shares to nine aircraft lessors to clear outstanding dues worth 2.31 billion rupees (nearly $28 million), as the troubled airline looks to return to full operations.
The carrier’s shareholders passed a number of resolutions, including a Rs 25 billion fundraising and a preferential issue of shares to lessors to clear outstanding dues.
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