Indian airline SpiceJet tells court it is 'struggling to stay afloat'

NEW DELHI, Aug 24 (Reuters) – Indian budget airline SpiceJet told a court on Thursday it was “struggling to stay afloat”, as it was ordered to make a payment to its former owner over money owed.

In 2018 SpiceJet lost an arbitration case arising out of share transfers from former owner Kalanithi Maran to the company’s new management in 2015, making the airline liable to pay $70 million plus interest. Maran later took SpiceJet to court saying he was still owed $48 million.

In a Delhi High Court hearing on Thursday on Maran’s case demanding the dues, SpiceJet said it was struggling financially.

“We are struggling to stay afloat,” the airline’s lawyer Amit Sibal told the judge.

SpiceJet offered to deposit 750 million rupees ($9.08 million) within 10 days, but the judge ordered the airline to pay 1 billion rupees ($12 million) by Sept. 10 and warned it could consider seizing the company’s assets to recover the dues, if it fails to comply.

SpiceJet said in a statement it would honour the court order and “make the specified payment within the prescribed timeframe.”

The order comes days after India’s Supreme Court, in a separate case, asked SpiceJet’s Managing Director Ajay Singh to appear in court and defend allegations by Credit Suisse claiming certain unpaid dues.

Both the Delhi High Court case and the Supreme Court case will next be heard on Sept. 11.

SpiceJet this month reported its highest quarterly profit in four years, helped by a sharp drop in expenses due to fewer flights operated. SpiceJet has also been scrambling to raise funds and restore operations for about a fourth of its fleet, which has been grounded amid battles with its lessors over payments, as competition heats up fiercely in the sector.

While India’s biggest carrier IndiGo and Tata group-owned Air India have hundreds of new planes on order, another budget airline, Go First, filed for bankruptcy in May.

($1 = 82.5590 Indian rupees)

Reporting by Arpan Chaturvedi; Editing by Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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