SpiceJet says no plans to seek insolvency proceedings; starts process to revive grounded planes with USD 50 mn

On Thursday, SpiceJet said it has no plans to file for insolvency proceedings and has also started the process of reviving its grounded fleet with USD 50 million.

New Delhi: Budget carrier SpiceJet on Thursday said it has no plans to file for insolvency proceedings and has also started the process of reviving its grounded fleet with USD 50 million. The statement from SpiceJet comes at a time when a lessor has filed an insolvency resolution plea against the airline and crisis-hit rival Go First being admitted for voluntary insolvency resolution proceedings by the National Company Law Tribunal (NCLT) on Wednesday.

While citing the recent developments in the Indian aviation market, SpiceJet said it has no plans whatsoever to file for insolvency. "We want to scotch any speculation that may have arisen due to the filing by another airline. The airline is firmly focussed on its business and remains in active talks with investors to raise funds," it said in a statement.

On May 8, the NCLT issued a notice to the budget carrier on the insolvency plea filed by lessor AirCastle (Ireland) Ltd and the matter is scheduled for a hearing next week. Besides, lessors have sought the deregistration of three planes of SpiceJet.

"There is absolutely no question of filing for insolvency. Any rumour regarding the same is completely baseless. We are focused firmly on reviving our grounded fleet and getting more and more planes back into the air. Work on this front has already begun, and the company is using the USD 50 million ECLGS funds and our own cash," SpiceJet Chairman and Managing Director Ajay Singh said.

SpiceJet also said that it has initiated the process of reviving its grounded fleet with the USD 50 million funds received by the airline from the government's Emergency Credit Line Guarantee Scheme (ECLGS) and internal cash accruals. Shares of the airline fell 1 per cent to Rs 29.62 in the afternoon trade on the BSE.

Last week, the airline announced plans to revive 25 grounded aircraft. The airline has around 80 planes in its fleet and is looking to revive 25 grounded Boeing 737 and Q400 aircraft. (PTI)