SpiceJet Faces Insolvency Plea by Engine Lease Finance Over $12M Debt

Engine Lease Finance BV, an aircraft engine lessor to SpiceJet, has filed an insolvency petition against the airline over a debt exceeding $12 million. ELF claims unpaid dues since April 2021. Various insolvency petitions by other creditors of SpiceJet are also ongoing, with some already settled or dismissed.

Engine Lease Finance BV, an aircraft engine lessor of SpiceJet, has moved an insolvency plea before the NCLT against the debt-ridden air carrier over non-payment of over USD 12 million (around Rs 100 crore).

Engine Lease Finance (ELF) has leased eight engines to SpiceJet. Along with interest and rental, ELF has claimed an amount of around USD 16 million. The matter was listed before a Delhi-based bench of the National Company Law Tribunal (NCLT) on Wednesday, which heard it briefly. Counsel appearing for SpiceJet sought time to respond to the petition filed by Engine Lease Finance.

On this, the NCLT bench comprising members Mahendra Khandelwal and Sanjeev Ranjan directed SpiceJet to file its response to the petition.

Headquartered in Shannon, Ireland, ELF is the world's leading independent engine financing and leasing company.

It entered into an agreement in 2017 with SpiceJet to lease engines. According to the petitioner, the low-budget carrier has defaulted on payments since April 2021.

During the hearing counsel appearing for SpiceJet contended that there is a pre-existing dispute between them.

Earlier, ELF had approached the Delhi High Court against SpiceJet in 2023 after terminating the lease for two engines and sought possession.

Later both the parties arrived at a settlement and ELF decided not to pursue the matter. However, it again approached the high court after alleging SpiceJet had failed to pay in accordance with the terms. The matter is still pending before the Delhi High Court.

SpiceJet has faced insolvency petitions from several of its creditors which include Willis Lease, Aircastle Ireland Ltd, Wilmington and Celestial Aviation. The NCLT rejected the pleas of Willis Lease Finance and Wilmington Trust. Spicejet settled the case with Celestial Aviation. The petitions filed by Aircastle and Alterna Aircraft are pending before the insolvency tribunal. Both Wilmington Trust and Willis Lease Finance have moved the National Company Law Appellate Tribunal (NCLAT) challenging the dismissal of their insolvency plea by NCLT.

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