Indian budget airline SpiceJet has committed to paying $1.5 million to Credit Suisse (SIX:CSGN) and clearing a Rs 100 crore (Rs 1 crore = $120,594) debt to former promoter Kalanithi Maran, according to a company statement. The announcement followed a directive from the Delhi High Court, which warned of potential drastic action, including possible jail time for SpiceJet's current promoter, Ajay Singh.
SpiceJet's legal dispute with Credit Suisse began in 2021 when the bank took the airline to court over its failure to make payments of over $24 million to maintenance, repair and overhauling (MRO) service provider SR Technics. A financing agreement between Credit Suisse and SR Technics had given the bank the right to receive payments from SpiceJet. Following the airline's continued inability to clear its debt, the Madras High Court ordered SpiceJet's liquidation in December 2021. The case was then moved to India's top court.
In May 2022, SpiceJet announced that it had reached a settlement with Credit Suisse. However, by March 2023, Credit Suisse had approached the Supreme Court seeking to initiate contempt proceedings against Singh and SpiceJet for "a wilful and intentional disobedience" of court orders and failure to pay dues.
SpiceJet also confirmed that it would complete the payment of Rs 100 crore to Kal Airways Private Limited as per the directions of the Delhi High Court. The airline stated that it had already paid Rs 77.5 crore and would pay the remaining Rs 22.5 crore by Tuesday, 12 September.
The company emphasized its commitment to complying with all court directives and obligations in both cases. "SpiceJet acknowledges the legal process and is committed to complying with all court directives and obligations in the Credit Suisse case and will make the payment of USD 1.5 million as per the court directive. Till date, SpiceJet has already paid a total of $8 million to Credit Suisse," the airline said in its statement.
The shares of SpiceJet Limited were trading at Rs 38.69 ($1 = Rs 82.97), down by 3.28 percent on Tuesday morning at 11:05 am IST. The liability predates the current promoter taking over the company.
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