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SpiceJet defaults on payments, dues over Covid impact, shaky finances

SpiceJet said its management is confident that they will be able to negotiate settlements in order to minimise or avoid any or further penalties.Premium
SpiceJet said its management is confident that they will be able to negotiate settlements in order to minimise or avoid any or further penalties.

On account of its operational and financial position, and the impact of the ongoing Covid-19 pandemic, SpiceJet has deferred payments to various parties, including lessors and other vendors and its dues to statutory authorities

Announcing its financial results for June quarter, SpiceJet said that it has deferred payments to various parties, including lessors and other vendors and its dues to statutory authorities. The defaults were on account of its operational and financial position, and the impact of the ongoing Covid-19 pandemic, the airline said in a regulatory filing on Friday.

“The company has a negative net worth of 3,298.72 crore as at June 30, 2021. The losses have been primarily driven by adjustments on account of implementation of IndAS 116, adverse foreign exchange rates, fuel prices, pricing pressures, and the impact of Covid-19 (first wave and recent second wave), whose effects have continued to have an impact on the results for the year ended 31 March 2021 and quarter ended 30 June 2021," the airline said.

“On account of its operational and financial position, and the impact of the ongoing Covid-19 pandemic, the company has deferred payments to various parties, including lessors and other vendors and its dues to statutory authorities," SpiceJet further added.

SpiceJet said its management is confident that they will be able to negotiate settlements in order to minimise or avoid any or further penalties.

On grounded Boeing 737 MAX aircraft, SpiceJet said that it is continuously engaging the aircraft manufacturer to recover damages on account of expenses incurred by it due to the grounding of the 737 MAX fleet. SpiceJet said it is also engaging with lessors of the grounded MAX aircraft to restructure the present leases.

The budget carrier reported a net loss of 729 crore for the quarter ended June 30, 2021, as against a loss of 593.4 crore in the corresponding quarter last year. The loss came despite substantial rise in revenue during the quarter as the airline said its business continued to face headwinds due to the Covid-19 restrictions.

Total income for the quarter under review increased 80 per cent to 1,265.85 crore as against 704.56 crore in the same quarter of the previous year. Total revenue from operations grew 112 per cent to 1,089.73 crore, from 514.69 crore.

SpiceJet shares ended Friday's trade at 71.90 on BSE, up 0.45 points or 0.63 per cent.

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