SpiceJet, Credit Suisse reach an agreement for settlement

Budget carrier SpiceJet Ltd. on Thursday said it has reached an in-principle agreement with Credit Suisse for settlement of a dispute which entails the airline paying the settlement amount over some time.

"SpiceJet had already deposited $5million on the direction of the Hon’ble Madras High Court in the Credit Suisse case and there is no adverse financial liability on the Company," the airline said in a statement. “The settlement involves payment of settlement amount over a mutually agreed period of time.”

Credit Suisse had dragged SpiceJet to the Madras high court last year after the airline failed make payments of over $24 million to Swiss maintenance, repair and overhauling (MRO) service provider SR Technics. Credit Suisse was mandated to receive the pending dues on behalf of SR Technics.

In December, following the petition from the Credit Suisse, the Madras high court had directed the winding-up of Spicejet. The Supreme Court, however, had stayed the order in January, granting the airline the three weeks it requested to resolve its dispute with Credit Suisse AG.

SpiceJet has been largely a loss-making airline over the last two years, having reported seven consecutive quarter of losses till 30 September 2021.

For the three months ended 31 December, the airline reported a consolidated net profit of ₹42.45 crore, primarily due to the compensation it claimed for the grounding of Boeing 737Max planes.

Mounting losses have resulted in complete erosion of SpiceJet’s net worth, with its liabilities exceeding its assets by ₹6,347.10 crores as of end of December, the auditors of the airline, Walker Chandiok &.Co LLP had said in a statement accompanying the results.

SpiceJet, which had seen a slew of lawsuits mainly due to its failure to settle pending dues during the pandemic, said it has also come to settlements with De Havilland Aircraft of Canada Limited (DHC), aircraft lessors CDB Aviation and Avolon.