Engine lessors reject Ajay Singh’s share pledge offer to settle SpiceJet’s dues

SpiceJet Ltd’s two French engine lessors—Team France 01 SAS and Sunbird France 02 SAS—on Monday rejected chairman and managing director Ajay Singh's offer to pledge his shares as collateral for the budget carrier’s outstanding liabilities.

The lessors told the Delhi high court that they were unwilling to accept shares from a company with questionable stability.

The lessors' counsel demanded disclosure of Singh’s assets and gave SpiceJet 15 days to make alternative arrangements, ground and return the three engines in question.

The court will next hear the case on 14 August.

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The development follows the high court's 8 August demand for personal guarantees from SpiceJet's directors should the airline fail to meet its financial obligations.

The court had given SpiceJet until 12 August to confirm whether the directors would assume personal liability and provide asset declarations.

SpiceJet had earlier stated its plan to raise ₹3,000 crore through a qualified institutional placement (QIP) by 30 September to alleviate its financial stress. The airline assured the court that ₹4.9 crore would be paid in a lump sum from the equity proceeds by the end of September to cover the outstanding dues.

Despite this, the lessors are reluctant to continue settlement talks and wish to reclaim their engines.

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Demanding to ground the engines, the lessors said they had been patient since December. According to them, these highly efficient engines are being used without payment.

However, SpiceJet argued that grounding the aircraft would severely impact the company’s revenue and operations.

Team France 01 SAS and Sunbird France 02 SAS filed their case against SpiceJet in December, claiming unpaid dues of over $20 million, court filings show.

SpiceJet has faced multiple legal battles over unpaid dues in the Delhi high court and the National Company Law Tribunal (NCLT), including contempt charges and regular rebukes for failing to pay creditors and comply with court orders.

On 9 June, the Delhi high court ordered the registration of a contempt case against SpiceJet's directors for not complying with its order to return two airframes and three engines to lessor TWC Aviation Capital Ltd.

Also Read: For SpiceJet to stay afloat, some crew will have to deplane

These cases highlight SpiceJet's financial difficulties.

The sixth-largest airline in India, with a 4% market share, employs over 8,000 people. However, it has also been criticized for delays in salary payments and defaults on provident fund contributions.