'Struggling to stay afloat': SpiceJet to Indian court

Indian low-cost carrier, SpiceJet told Delhi High Court on Thursday it was “struggling to stay afloat”, after it was told to make a payment for money owed to its former owner.

SpiceJet was forced to pay $70 million plus interest after losing an arbitration case in 2018, which involved share transfers from the company’s former management to Kalanithi Maran in 2015. Later, Maran sued SpiceJet, alleging that he was still due $48 million.

SpiceJet said it was having financial difficulties at a hearing before the Delhi High Court on Thursday in response to Maran’s lawsuit seeking the unpaid debts.

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“We are struggling to stay afloat,” the airline’s lawyer Amit Sibal told the judge.

SpiceJet said that it would deposit 750 million rupees ($9.08 million) within 10 days, but the judge instead demanded that the airline pay one billion rupees ($12 million) by September 10 or risk having its assets seized in order to recoup the debt.

In a statement, SpiceJet agreed to uphold the court decision and “make the specified payment within the prescribed timeframe.”

The directive was issued a few days after the Indian Supreme Court ordered SpiceJet’s managing director, Ajay Singh, to appear in court to defend Credit Suisse’s claims for certain outstanding dues that were owed.

The Supreme Court case and the Delhi High Court case will both be heard next on September 11.

Due a substantial decrease in costs brought by the operation of fewer flights, SpiceJet posted its biggest quarterly profit in four years, last month. As competition in the industry becomes tougher, SpiceJet has also been frantically trying to obtain funds and resume operations for nearly a fourth of its fleet, which has been grounded due to disputes with its lessors over payments.

(With inputs from Reuters)

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