SpiceJet welcomes NCLT relief as Aviator ML withdraws insolvency case

Aviator ML's withdrawal gives SpiceJet some relief, but seven insolvency cases remain.

In Short

• NCLT allows Aviator ML to withdraw insolvency plea against SpiceJet after settlement
• Both parties fined for late disclosure of settlement to tribunal
• Seven other insolvency petitions against SpiceJet remain active

SpiceJet has received some relief in its insolvency battle after the National Company Law Tribunal (NCLT) allowed aircraft lessor Aviator ML to withdraw its insolvency plea against the airline following a settlement between the two sides.

However, the tribunal also imposed a fine on both SpiceJet and Aviator ML for informing it about the settlement only after the case had reached the final order stage, ET Now reported.

The order means Aviator ML's insolvency petition will not move ahead. However, SpiceJet still faces seven other insolvency petitions filed by aircraft lessors over unpaid dues.

WHY DID NCLT IMPOSE A FINE?

The settlement between SpiceJet and Aviator ML was brought before the tribunal at the last minute.

The NCLT had already heard arguments and spent time preparing its order when the two sides informed it about the settlement. The tribunal had earlier criticised both parties for disclosing the settlement only on the day the order was due to be pronounced.

The NCLT allowed Aviator ML to withdraw its petition, but made the withdrawal subject to both SpiceJet and Aviator ML paying a fine.

The exact amount of the fine was not known at the time of filing the report.

SPICEJET WELCOMES NCLT ORDER

SpiceJet welcomed the tribunal's decision and said the Aviator ML petition had been disposed of as withdrawn.

“SpiceJet welcomes the order of the National Company Law Tribunal (NCLT), which has disposed of the petition filed by Aviator ML as withdrawn,” the airline said.

The airline said the seven other claims would now be heard afresh according to due process.

“We view the order as a positive step towards resolving the outstanding matters and remain committed to working closely and constructively with our partners to find mutually acceptable solutions,” SpiceJet said.

SEVEN INSOLVENCY CASES REMAIN

The Aviator ML case was one of eight insolvency petitions filed against SpiceJet by aircraft lessors over unpaid dues.

With Aviator ML withdrawing its plea, seven cases remain. These petitions will now be heard afresh, keeping the possibility of insolvency proceedings against the airline alive.

The NCLT had also sought clarity on whether SpiceJet was negotiating settlements with the other lessors. Lawyers representing some of the remaining lessors had asked the tribunal to continue with their cases.

If the NCLT admits even one of these petitions, SpiceJet could face a formal Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code.

An insolvency professional could then oversee the company's affairs while creditors work towards resolving their claims.

AIRLINE FOCUSSED ON REBUILDING OPERATIONS

SpiceJet has been under financial pressure for some time, with grounded aircraft, reduced operations and ongoing disputes with creditors adding to its challenges.

The airline said it is now focused on rebuilding its operations and strengthening its fleet.

“SpiceJet has been through a challenging period and is focused on rebuilding the airline, strengthening its operations and restoring its fleet,” the airline said.

It added that it remains committed to working with its stakeholders.

“We remain committed to working with all our stakeholders in a spirit of cooperation as we move forward,” SpiceJet said.

WHAT THE ORDER MEANS FOR SPICEJET

The withdrawal of the Aviator ML petition gives SpiceJet some breathing room, but it does not end the airline's insolvency troubles.

The remaining seven cases will be important for the airline as it tries to settle outstanding disputes with lessors and get more aircraft back into service.

For now, SpiceJet will have to continue working on settlements while preparing to face the remaining insolvency petitions before the NCLT.

- Ends