SpiceJet, Credit Suisse settle default dispute
Indian low-cost airline Spicejet and Swiss lender Credit Suisse have signed and concluded the settlement and consent terms regarding the pending dispute between the two parties.
The settlement and consent terms, which were executed on May 23, 2022, have also been filed before the Supreme Court for final orders.
“SpiceJet had already provided Bank Guarantee of $5 million on the direction of the Madras High Court in the matter and there is no adverse financial liability on the company. The settlement involves payment of certain amount upfront and balance amount over a mutually agreed timeline,” says the Ajay Singh-led airline in a regulatory filing on Wednesday.
The settlement with Credit Suisse follows successful settlements and performances therein with De Havilland Aircraft of Canada Limited (DHC), Boeing, CDB Aviation, BOC Aviation and Avolon, and provides an impetus to normalisation, growth and expansion of the airline, SpiceJet says in the filing.
The chain of events began last year after Credit Suisse moved the Madras High Court to file a winding-up plea over payment defaults to the tune of $24 million to Swiss maintenance, repair and overhauling (MRO) service provider SR Technics. Credit Suisse was mandated to receive this amount on behalf of the MRO agency.
Against the petition filed by Credit Suisse, the Madras High Court ordered the winding-up of SpiceJet in December 2021. The airline then moved the apex court to appeal the high court order. The Supreme Court stayed the winding-up order in January this year, granting SpiceJet three weeks to resolve its dispute with Credit Suisse.
In turn, the domestic no-frills carrier had informed the Supreme Court on March 31 that it had settled the dispute with Credit Suisse over payment defaults. It had announced shortly after that both parties had arrived at an in-principle agreement for a commercial settlement of the dispute.
Today morning, several SpiceJet flights were delayed following a ransomware attack on certain systems of the airline last night. While the airline claimed it had rectified the system, passengers complained of flights delayed by several hours, with no clear update on when they will take off.
Shares of SpiceJet were trading in the red on Wednesday after opening at ₹49.95, against the previous close of ₹49.70. The airline stock had briefly soared to the day’s high of ₹52.45 in early trade before reaching the intraday low of ₹49.10 by afternoon. At the time of reporting, the SpiceJet share has pared some of the losses to reach ₹49.65, down 0.05 points or 0.10%.