The media report suggested that Celestial Aviation has moved NCLT for a default of $20.9 million fo nine aircrafts against SpiceJet.
Shares of SpiceJet Ltd rallied nearly 18 per cent in Friday’s trade amid a media report suggesting the co-founder of airline IndiGo, Rakesh Gangwal, was in advanced advanced stage of talks to acquire a stake in the BSE-listed firm. Gangwal held 5,10,21,132 shares or 13.23 per cent stake in InterGlobe Aviation Ltd at the end of June quarter.
Last month, SpiceJet complied with the directive of the Supreme Court by remitting $1.5 million to Credit Suisse. The payment was executed on September 14. Also SpiceJet made a payment of Rs 100 crore to Kal Airways Private Limited, as per the directions of the Delhi High Court.
SpiceJet shares rally 18% on report :
SpiceJet Ltd (SPICEJET) Share Price
- Sector: Air Transport Service (Small Cap)
- Volume: 1719564
Apr 28, 2023 15:59 IST
The fresh report by ET Now citing sources suggested that SpiceJet was looking to revive the airline. Following the development, the stock rose 17.74 per cent to hit a high of Rs 43 on BSE.
For the June quarter, SpiceJet logged a net profit of Rs 205 crore compared with a loss of Rs 789 crore in the corresponding quater of last year, thanks to strong air travel demand. It also registered industry’s highest domestic load factor of 90 per cent in the June quarter.
Lessor petitions for insolvency against SpiceJet is pending at NCLT Mumbai. The ET NOW report noted that Celestial Aviation has moved NCLT for a default of $20.9 million fo nine aircrafts against SpiceJet. Other lessors like Willis lease, Aircastle and Wilmington have also moved NCLT Mumbai against SpiceJet, the report suggested.
IndiGo co-founder Gangwal in talks to buy ‘sizable’ stake in SpiceJet
SpiceJet faces new bankruptcy code rider in case vs aircraft lessors :
The National Company Law Tribunal (NCLT) on Tuesday told low-cost airline SpiceJet and its aircraft lessors, Aircastle and Wilmington, to study the impact of the government’s notification, issued last week, removing aviation lease agreements from the moratorium under the Insolvency and Bankruptcy Code (IBC).
The next hearing in the cases is expected to come up on November 7.
Aircastle and Wilmington have filed insolvency pleas against SpiceJet over unpaid dues.
However, the airline has also challenged the maintainability of these petitions on certain technical grounds.
The Centre had issued a notification on October 3 providing that the moratorium under the Insolvency and Bankruptcy Code, 2016 will not apply to aircraft, aircraft engines, airframes and helicopters governed by the Cape Town Convention.
A moratorium gives bankrupt companies some immunity in legal cases and makes it difficult for lessors and creditors to recover their assets. However, with the lifting of this moratorium this protection has been reduced.
While the lessors have filed cases against Spicejet for the settlement of their dues, SpiceJet has also filed a plea questioning the maintainability of Aircastle’s petition.
SpiceJet has challenged the validity of Aircastle’s power of attorney, which grants authority to its representative, and also asserted that Aircastle had not filed a proper affidavit in support of its insolvency petition.
The next hearing is expected to provide more clarity on various issues taking into account the impact of the government’s notification.
The government’s notification to exempt transactions involving aircraft, aircraft engines, and helicopters from the IBC was issued in consonance with India’s international treaty obligations as the country was a signatory to the Cape Town Convention and its Aircraft Protocol (CTC).
Aviation Working Group, a global watchdog representing aircraft manufacturers and leasing firms, had put India on a watchlist with a negative outlook in May and has now given the country a positive rating after the notification was issued.