SpiceJet settles $1.5 million debt with Credit Suisse
What's the story
SpiceJet has paid $1.5 million to Credit Suisse, adhering to the Supreme Court of India's order, the company said in a regulatory filing. The payment was made on September 14, just a day before the deadline set by the apex court. The Supreme Court earlier had made it clear that failure to meet this deadline would result in "drastic action."
Details
Background of the legal dispute
The SpiceJet and Credit Suisse legal feud started in 2015 when Credit Suisse asserted unpaid dues totaling approximately $24 million. In March, Credit Suisse asked the Supreme Court to take action against SpiceJet and its founder, Ajay Singh. It accused SpiceJet of not following court orders and failing to pay a $3.9 million debt from an earlier agreement. SpiceJet argued that this debt existed before the current management took over, making the legal battle more complicated.
What Next?
Airline's monthly settlement plan explained
A third of the $1.5 million payment made by SpiceJet to Credit Suisse is part of a monthly settlement plan that the airline had previously agreed upon with the bank. The remaining amount covers unpaid dues. SpiceJet contends that the outstanding debt in question is an older one that originated before the current management's tenure.
Insights
Supreme Court's firm stance
The Supreme Court had earlier issued a stern warning to Singh, stating that he could be sent to Tihar Jail if he didn't comply with the order to make payments to Credit Suisse. The court, led by Justices Vikram Nath and Ahsanuddin Amanullah told Singh, "We are not bothered even if you die. We will send you to Tihar jail if you do not pay." The case will resume for further proceedings on September 22.
What Next?
SpiceJet's share reacts positively
In response to this development, SpiceJet's share price saw a notable uptick, trading 3.26% higher at Rs. 39.63 apiece on the BSE at the time of writing. The stock reached its peak for the day at Rs. 40 per share. The positive market reaction suggests that investors are encouraged by the airline's compliance with the Supreme Court order, which could help alleviate concerns about the company's financial stability.