SpiceJet Gets Temporary Relief as Insolvency Case Faces Fresh Hearing
The airline reached a last minute settlement with creditor Aviator ML, delaying an immediate escalation of insolvency proceedings.
New Delhi, Aug. 21: Budget carrier SpiceJet has secured temporary relief in its ongoing financial dispute after reaching a settlement with creditor Aviator ML, prompting India’s National Company Law Tribunal (NCLT) to order a fresh hearing of the insolvency proceedings.
The settlement came shortly before the tribunal was expected to consider the insolvency case, which involves claims exceeding Rs 500 crore from eight creditors. The proceedings have already continued for more than two years.
The NCLT criticised the timing of the settlement, describing it as problematic, while the retirement of a member of the tribunal bench also meant the matter had to be reheard.
SpiceJet has faced prolonged financial difficulties, with the airline’s position worsening after years of losses, operational disruptions and the grounding of Boeing 737 MAX aircraft following the 2019 global grounding.
The Covid-19 pandemic further affected the aviation industry, adding to financial pressure on airlines. SpiceJet has also faced legal disputes over unpaid aircraft lease obligations, including an order from a UK court requiring it to pay millions of dollars in overdue payments.
The latest settlement gives the airline additional breathing room as it works to address creditor claims and strengthen its financial position. However, the fresh NCLT hearing means the company’s insolvency-related challenges remain unresolved.
