Budget airline SpiceJet today settled a $29.9 million (₹250 crore) dispute with Celestial Aviation, a subsidiary of AerCap, through negotiations, avoiding protracted litigation.
Representatives from SpiceJet and Celestial Aviation informed the National Company Law Tribunal (NCLT) last week that settlement terms had been reached and requested an adjournment, which the court granted. The formal withdrawal of the matter is scheduled for March 1, 2024.
“SpiceJet recently secured investments totalling ₹1,060 crore through a preferential issue, with notable investors including Aries Opportunities Fund Ltd and Elara India Opportunities Fund Ltd. Part of these funds will be allocated towards settling past liabilities,” SpiceJet says in a filing exchange.
Ajay Singh, chairman and managing director, SpiceJet, says the settlement marks a significant step forward for both parties. "With this resolution, we can now focus on revamping our fleet and driving our business forward."
The development comes days after SpiceJet's Preferential Allotment Committee on February 21 approved the allotment of 4.01 crore equity shares on a preferential basis, raising an additional ₹316 crore. The combined investments under the preferential issue now total ₹1,060 crore.
The committee also sanctioned the allotment of 2.31 crore warrants. “Additionally, the committee sanctioned the allotment of 2.31 crore warrants, offering the option to apply for and be allotted an equivalent number of equity shares, to four investors, including Elara India Opportunities Fund Ltd,” SpiceJet adds.
Notably, under its revival plan, SpiceJet had recently completed the first tranche of capital infusion amounting to ₹744 crore. The carrier says it already holds valid shareholder approval to raise up to ₹2,500 crore through qualified institutional placement (QIP).
Additionally, to save costs, SpiceJet recently announced to implement cost-cutting measures, including laying off around 1,000 employees. The move, it says, will save up to ₹100 crore. The churning is said to be somewhere 10-15%.
The company’s chairman and managing director Ajay Singh recently announced a joint bid for bankrupt airline GoFirst. The bid was submitted by Ajay Singh, in his capacity, along with Busy Bee Airways Private Ltd. Wadia group-owned GoFirst, which has been grounded since May 2023, slid into bankruptcy due to financial woes. As per SpiceJet, the bid for GoFirst, submitted on Friday (February 16, 2024), is a “strategic move”.
