SpiceJet Denies Insolvency Rumours Despite Receiving Notice From NCLT

Days after the National Company Law Tribunal (NCLT) issued a notice to Indian low-cost airline SpiceJet on a petition filed by an aircraft lessor seeking initiation of insolvency resolution proceedings against it, the airline has categorically stated that it has no plans whatsoever to file for insolvency. "We want to scotch any speculation that may have arisen due to the filing by another airline. The airline is firmly focussed on its business and remains in active talks with investors to raise funds," the airline said in a statement issued on Thursday while announcing that it has also initiated the process of reviving its grounded fleet with the $50 million funds received by the airline from the government`s Emergency Credit Line Guarantee Scheme (ECLGS) and internal cash accruals.

According to SpiceJet Chairman and Managing Director, Ajay Singh, there is absolutely no question of filing for insolvency. "Any rumour regarding the same is completely baseless. We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun and the company is using the $50 million ECLGS funds and our own cash," he said.

"We have a great relationship with all our partners. Our lessors have supported us through the thick and thin and continue to do so and we are grateful for their support and confidence."

SpiceJet had last week announced plans to revive 25 grounded aircraft that will help it capitalise and make the most of the upcoming peak travel season. SpiceJet is facing bankruptcy proceedings as Ireland-based aircraft lessor Aircastle Ltd has moved the principal bench of the NCLT to launch a bankruptcy process against the airline.

Agreeing to hear the lessor`s plea, a two-member bench of the NCLT issued a notice to the airline and posted the matter for further consideration on May 17. The bench, headed by NCLT President Ramalingam Sudhakar, directed SpiceJet to attend the hearing on the given date. Claiming default in dues payment, Aircastle has sought initiation of corporate insolvency proceedings against SpiceJet.

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A spokesperson for SpiceJet had commented that the notice was issued routinely in connection with the Aircastle matter. "In the Aircastle issue, notice was issued in normal course. There was no adverse ruling against SpiceJet. The court has recognised the fact that parties are under settlement discussions and they can continue to pursue the same," the spokesperson had said.