UK Leasing

SpiceJet’s offer to get rid of freight business runs into turmoil

SpiceJet’s plans to part with its cargo business met with a roadblock with Delhi’s High Court issuing an interim injunction against the debt-strapped airline preventing it from alienating part of the assets in a company distinct.

The court ruling comes after leasing company Goshawk filed a plea for the execution of $ 25.6 million in damages awarded against SpiceJet by a UK court.

SpiceJet had defaulted on two B737 Maxs as well as another aircraft it had leased from Goshawk. The leasing company then took the airline to UK court. The UK High Court issued an order in favor of the leasing company in April this year and asked the debt-strapped airline to pay $ 25.6 million in dues.

Execution request

To do this, the leasing company as well as its parent company filed a request for enforcement. The leasing company also requested a suspension of the company’s plans to divest its assets in the amount of $ 25.6 million to another entity.

A lawyer who appeared in the case and requested anonymity said: “Goshawk’s rationale was that if the assets are transferred to another entity, it becomes impossible for them to collect their contributions because then they cannot be seized to collect debts. “

After hearing the case, the Delhi High Court said in its interim order: “Until further orders, the judgment debtor is prevented from transferring / disposing of its assets up to the amount of the decrement.” The case is now due to be heard on November 29.

Goshawk is not the only lessor who pushed the Indian court to recover SpiceJet dues. Activity area reported that De Havilland had also asked Indian courts to recover $ 42.9 million in damages awarded to SpiceJet by a UK court.

Sources said that the divestiture of the cargo business to a subsidiary was the only opportunity for the company to raise funds as the promoter, Ajay Singh, expressed his inability to inject more funds.

While the majority of SpiceJet shareholders approved the split of the cargo unit, at least 17.2 percent of its shareholders voted against the plan. The majority of those who voted against are public institutions.

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