• Fri. Mar 1st, 2024

SpiceJet’s Market Soar: Settles $1.5 Million Debt with Credit Suisse

ByNishat Manzar

Sep 15, 2023

SpiceJet Takes Flight with 3% Surge After Settling $1.5 Million Debt to Credit Suisse.

In an impressive morning market rally on September 15, SpiceJet shares leaped by over 3 percent, following the airline’s announcement of its compliance with the Supreme Court’s directive.The business said that, in accordance with the court’s order, it had successfully transferred $1.5 million to Credit Suisse.

The transaction was executed on September 14, as disclosed in an exchange filing made by SpiceJet on September 15. By 10 am, the company’s shares were trading at Rs 39.79 on the Bombay Stock Exchange, reflecting a significant surge of 3.67 percent.

This remarkable change of events happened after the Supreme Court had warned SpiceJet’s CMD, Ajay Singh, sternly that the business would face “drastic measures” if it failed to pay its unpaid debts. Even one of the two judges said, “Enough of this dithering business…,” during the hearing. Even if you pass away, we won’t care.

SpiceJet had maintained that the Credit Suisse debt in question was an old one predating the current management’s tenure. The legal dispute between Credit Suisse and SpiceJet, rooted in a 2015 claim of unpaid dues amounting to around $24 million, led to the Madras High Court’s order for the airline’s winding-up in 2021.

Despite previously agreeing to a settlement plan, SpiceJet failed to honor its obligations. In March, Credit Suisse escalated the matter by approaching the Supreme Court, seeking to initiate contempt proceedings against SpiceJet and Ajay Singh, citing “wilful and intentional disobedience” of court orders and a failure to pay dues totaling USD 4.5 million.

Adding to its recent legal challenges, SpiceJet disclosed earlier this week that it had fulfilled the payment of Rs 100 crore to former promoter Kalanithi Maran’s KAL Airways, as per the Delhi High Court’s order regarding the execution of an arbitral award in a separate case.

While this development marks a positive turn for SpiceJet in the market, its year-to-date performance reveals a nearly 3 percent increase in share value, while the one-year return stands at a less favorable (-)10 percent.