Low-cost airline SpiceJet announced on Thursday that it had reached an in-principle commercial settlement with Credit Suisse in their $24-million dispute.
Credit Suisse claims that SpiceJet failed to honour its commitment to pay bills totaling over $24 million raised for aircraft engine and component maintenance, repair, and overhaul.
The Swiss banking conglomerate petitioned the Madras High Court, which ordered SpiceJet to be wound up and even appointed an official liquidator to take over the airline’s assets. However, the court allowed the Ajay Singh-led budget carrier to file an appeal in the Supreme Court.
On January 28, the Supreme Court granted SpiceJet three weeks to resolve its financial dispute and stayed the Madras High Court verdict.
“With regard to the pending dispute between Credit Suisse and SpiceJet Limited, we would like to inform you that the parties have now reached an in-principle commercial settlement and the documentation process is underway.” “The Credit Suisse settlement follows SpiceJet’s successful settlements with De Havilland Aircraft of Canada Limited (DHC), Boeing, aircraft lessors CDB Aviation and Avolon,” a SpiceJet spokesperson said.
“SpiceJet had already deposited $5 million on the order of the Hon’ble Madras High Court in the Credit Suisse case, and the Company has no adverse financial liability.” “The settlement entails payment of the settlement amount over a mutually agreed-upon time period,” the spokesperson added.
Until the time of publication, an e-mail query sent to Credit Suisse had not elicited a response.
In light of the airline’s dispute with Credit Suisse and potential liquidation, Tamil Nadu-based City Union Bank recently designated SpiceJet’s account as special mention account-1 (SMA-1) and decided to withdraw the Rs 100 crore bank overdraft facility extended to the airline. When interest or principal on loans is overdue for 31 to 60 days, lenders create an account SMA-1.
