Why India budget airline SpiceJet told Delhi court it’s struggling to stay afloat
Five years ago, the carrier lost an arbitration case arising out of share transfers from former owner Kalanithi Maran to its new management in 2015.
Representational Image (iStock)
INDIA’S budget airline SpiceJet on Thursday (24) told a court that it was “struggling to stay afloat” as it was asked to make a payment to its former owner over funds owed.
Five years ago, the carrier lost an arbitration case arising out of share transfers from former owner Kalanithi Maran to its new management in 2015, making it liable to pay a whopping $70 million (£55.4 million) along with the interest.
Maran later dragged SpiceJet to court claiming he still owed $48 million (£38 million).
In a hearing in the high court in Delhi on Thursday on the case seeking the dues, the budget airline said it was facing financial hardships.
“We are struggling to stay afloat,” the airline’s lawyer Amit Sibal told the judge.
While the airline offered to deposit Rs 750 million (£7.1 million) within 10 days, the judge asked it to pay Rs 1 billion (£9.5 million) by September 10 and failing which its assets could be seized to recover the dues.
In a statement, SpiceJet said it would honour the court’s order and “make the specified payment within the prescribed timeframe”.
The Delhi court’s order comes a day after India’s apex court asked SpiceJet’s managing director Ajay Singh to appear in court in another case and defend allegations brought by Credit Suisse seeking certain unpaid dues.
Both the cases in the high court and Supreme Court will be heard next on September 11.
In July, SpiceJet reported its highest quarterly profit in four years, facilitated by a sharp fall in expenses since fewer flights were in operation. It has also been trying to raise funds and restore operations for about a fourth of its fleet that has been grounded amid trouble with its lessors over payments.
In May, another budget Indian airline Go First filed for bankruptcy.