New Delhi: SpiceJet on Tuesday said it has successfully resolved its dispute with Engine Lease Finance Corporation ( ELFC) by reaching an amicable financial settlement with the engine lessor.
The resolution tracks the budget airline raising ₹3,000 crore through a Qualified Institutional Placement (QIP), giving it a lifeline amid a severe financial crisis.
As part of this agreement, ELFC will withdraw its insolvency petition against the airline, SpiceJet said in a regulatory filing.
"We are pleased to have reached a mutually beneficial settlement with ELFC, which allows us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on our next phase of growth and expansion," said Ajay Singh, chairman and managing director of SpiceJet.
ELFC, the world's leading independent engine leasing company based in Shannon, Ireland, had leased eight engines to SpiceJet in 2017. The company claimed around $16 million in unpaid dues, including interest and rental, with default payments stretching back to April 2021.
The matter escalated to the National Company Law Tribunal (NCLT), where SpiceJet had initially raised objections, citing technical defects in ELFC's plea. The tribunal granted ELFC the opportunity to rectify these errors, after which a formal notice was issued to the airline.
The airline had earlier settled disputes with some creditors, including Celestial Aviation, but several cases have been escalated to the National Company Law Appellate Tribunal (NCLAT) by dissatisfied petitioners.
Bolstered by the latest fundraise, SpiceJet aims to have a fleet of 100 aircraft by the end of 2026, Singh told ET recently.
He added that the carrier managed to reach amicable resolution with both aircraft manufacturers and lessors, and that ₹750 crore from the fundraise funding will be used to settle the remaining dues.
"Defaulting on lease payments is not a unique situation for us as multiple airlines couldn't manage to pay after Covid. But lessors are very much invested to do business with airlines who have managed to stay alive and refinanced themselves. We have already settled with many of our largest lessors and the remaining will be done quickly," he said.
The resolution tracks the budget airline raising ₹3,000 crore through a Qualified Institutional Placement (QIP), giving it a lifeline amid a severe financial crisis.
As part of this agreement, ELFC will withdraw its insolvency petition against the airline, SpiceJet said in a regulatory filing.
"We are pleased to have reached a mutually beneficial settlement with ELFC, which allows us to move forward with a clean slate. This agreement not only resolves past issues but also strengthens our position as we embark on our next phase of growth and expansion," said Ajay Singh, chairman and managing director of SpiceJet.
ELFC, the world's leading independent engine leasing company based in Shannon, Ireland, had leased eight engines to SpiceJet in 2017. The company claimed around $16 million in unpaid dues, including interest and rental, with default payments stretching back to April 2021.
The matter escalated to the National Company Law Tribunal (NCLT), where SpiceJet had initially raised objections, citing technical defects in ELFC's plea. The tribunal granted ELFC the opportunity to rectify these errors, after which a formal notice was issued to the airline.
The airline had earlier settled disputes with some creditors, including Celestial Aviation, but several cases have been escalated to the National Company Law Appellate Tribunal (NCLAT) by dissatisfied petitioners.
Bolstered by the latest fundraise, SpiceJet aims to have a fleet of 100 aircraft by the end of 2026, Singh told ET recently.
He added that the carrier managed to reach amicable resolution with both aircraft manufacturers and lessors, and that ₹750 crore from the fundraise funding will be used to settle the remaining dues.
"Defaulting on lease payments is not a unique situation for us as multiple airlines couldn't manage to pay after Covid. But lessors are very much invested to do business with airlines who have managed to stay alive and refinanced themselves. We have already settled with many of our largest lessors and the remaining will be done quickly," he said.
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