SpiceJet said it is hopeful of a favourable outcome in its proposed appeal against a winding up petition ordered by the Madras High Court. The High Court on Monday ordered winding up of the airline on a petition filed by Credit Suisse over unpaid dues of $24 million. The court also directed an official liquidator to take over the assets of the airline. The order was subsequently stayed for three weeks following a plea by the airline and on the condition that it deposits $ 5 million with the court within two weeks.
“The company is examining the order and initiating appropriate remedial steps including preferring an appeal before the appellate jurisdiction within the timeframe allowed by the Madras High Court. The company believes it has a good case on merits and is hopeful of having a favourable outcome in the appeal,” the airline said in a stock exchange notification. Simultaneously SpiceJet is engaging with its creditors and suppliers to allay their concerns over the high court order and update them about fundraising plans. The airline expects to receive the first tranche of compensation from Boeing over the next few weeks and hopes to utilize the amount to clear its statutory dues.
The petition in Madras High Court arose from a 2011 engine maintenance contract the airline signed with Swiss firm SR Technics. SR Technics entered into a financing agreement with Credit Suisse in 2012 and assigned it rights to receive all the current and future receipts. It filed a winding up petition as SpiceJet failed to make payments under various invoices.
SpiceJet opposed the petition on the grounds that SR Technics did not possess Directorate General of Civil Aviation approval for providing engine maintenance services. It said Credit Suisse as an assignee can not have any right against the airline as engine maintenance agreement was void. The High Court however rejected the airline’s contention and ordered the winding up of the airline.
