Following the failure of SpiceJet to pay the pending dues of $24 million to the Swiss company SR Technics, the Madras High Court ordered the official liquidator to take over the assets of the airline. The Court asked the airlines to wind up its operations. Although the judgement is out, SpiceJet will get a gap of three weeks to go for an appeal. The verdict will not be executed until then. To gain this stay on the ruling, the airline has to deposit $4 million to the credit of the SR Technics within a fortnight.
SR Technics maintains, repairs and overhauls aircraft engines and components. SpiceJet executed an agreement with SR Technics in 2011, valid for ten years, for availing its services. The duo further entered into a supplemental agreement in August 2012 to change specific terms of the agreement, primarily bringing an extension of time for the payment of money due under various invoices and also included a deferred payment scheme.
The petition was filed by Credit Suisse AG, which has been mandated to receive pending dues on behalf of SR Technics.
Against the invoices raised by SR Technics, SpiceJet issued seven bills of exchange for the money due to the company. According to the Court, the issue of the certificate of acceptance in relation to the bills of exchange implies that SpiceJet accepts the correctness of the claim made in the invoices. The repeated failure to make payments finally prompted the petitioner to approach the Court to execute statutory notices.
SpiceJet reported Rs 571 crore in the previous quarter
SpiceJet reported a loss of about Rs 571 crore for the seventh consecutive quarter during the three months ended in September. The continuous losses eroded the airline’s net worth, with its liabilities exceeding its assets by Rs 6,123.73 crore at the end of September.
SpiceJet is also facing a lawsuit by aircraft lessor Goshawk and its trustee Wilmington Trust SP Services Dublin Ltd regarding unpaid dues at the Delhi High Court, which is set to hear the case on 14 December.
Meanwhile, the airline’s competitor IndiGo gained a stock surge of 4% following the news of its failure.