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Amidst woes of mounting debt claims, SpiceJet accused of 'cannibalizing' grounded flight engine

By Shreya Agarwal      18 January, 2024 05:32 PM      0 Comments

NEW DELHI: Even as sinking airline SpiceJet's creditors mount claims on it for dues surpassing $25 mln, Engine Lease Finance BV, a lessor to SpiceJet, told Delhi High Court that SpiceJet has cannibalized one of its leased engines and is using it despite a grounding agreement.

The Delhi High Court has thus granted Engine Lease Finance permission to inspect an engine leased to the airline.

The Court stipulated that the inspection should occur once during the engine's grounding and again at re-delivery, according to a report in LiveMint.

SpiceJet has also been directed to maintain the status quo post-grounding, using the engine solely for refurbishment purposes.

The next hearing in the matter is scheduled for the last week of January.

Facts

Engine Lease Finance moved Court after unsuccessful settlement talks with SpiceJet. It alleged partial payments and default of even the interim October settlement agreement.

In the interim settlement of October, SpiceJet had reportedly agreed to pay over $2 million to the lessor by January 25 and also return the leased engines by this date.

The agreement permitted Engine Lease Finance to terminate the lease or seek move court in case of default.

SpiceJets mounting dues

Besides $2 mln owed to Engine Lease Finance as part of the interim settlement, SpiceJet owes Alterna Aircraft BV Ltd, an Ireland-based lessor, an amount of $11.1 million and 265,000, as ordered by English courts, and around $12.9 mln to EAM France 01 SAS and Sunbird France 02 SAS.

SpiceJet faces recovery proceedings either in the Delhi High Court or the National Company Law Tribunal (NCLT) for all the mentioned dues.

(This is not an exhaustive list of SpiceJets dues).



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