SpiceJet's Lessors Told To Study Impact Of IBC Notification On Leases By NCLT

SpiceJet and its lessors, Aircastle and Wilmington, have been directed by the National Company Law Tribunal (NCLT) to assess the impact of a recent notification.

The notification eliminates aviation lease agreements from moratorium under the Insolvency and Bankruptcy Code, 2016, according to Moneycontrol.

The cases will be heard on November 7 for further consideration.

Aircastle and Wilmington, who are aircraft lessors, have filed insolvency pleas against SpiceJet due to unpaid dues. However, SpiceJet has disputed the petitions' maintainability based on technical grounds.

To comply with the Cape Town convention, the ministry of corporate affairs released a notification on October 4. The notification exempts aircraft, aircraft engines, airframes, and helicopters from moratorium.

The Cape Town Convention (CTC) is an international agreement that provides lessors with the right to repossess high-value equipment such as engines, aircraft, and helicopters in the event of a default in payment.

Aircastle (Ireland) Ltd had filed an insolvency petition against SpiceJet on April 28. Pleas by its other lessors, Willis Lease Finance Corporation and Acres Buildwell Private Ltd were filed on 12 April and 4 February, respectively.

The Ajay Singh owned budget airline has been involved in several legal suits with its lessors and creditors ever since it ran into financial troubles late last year.

The company has been facing multiple financial issues in recent months due to intense competition, rising fuel costs, and delays in aircraft maintenance.

SpiceJet is not the only airline in India that is facing financial turbulence. Akasa Air and Go First are also not doing well, with the former having to deal with an exodus of pilots and the latter going bankrupt.