SpiceJet said on Thursday it has arrived at an in-principle commercial settlement with Credit Suisse in the $24-million dispute between the two parties. The dispute pertains to Credit Suisse alleging that the low-cost airline failed to honour its commitment to pay the bills for over $24 million raised towards maintenance, repairing, and overhauling of the aircraft engines and components.
The Swiss banking conglomerate had moved the Madras High Court, which ordered winding up of SpiceJet and even directed an official liquidator attached to the high court to take over the assets of the airline. However, the court permitted the Ajay Singh-run budget carrier to appeal its case in the Supreme Court. On January 28, the apex court granted SpiceJet three weeks to resolve its financial dispute and stayed the operation of the Madras HC verdict.
“With regard to the dispute pending between Credit Suisse and SpiceJet Limited, we would like to inform that the parties have now reached an in-principle commercial settlement of the dispute and the process of documentation is underway. The settlement with Credit Suisse follows SpiceJet’s successful settlements with De Havilland Aircraft of Canada Limited (DHC), Boeing, aircraft lessors CDB Aviation and Avolon,” a SpiceJet spokesperson said.
The person added, “SpiceJet had already deposited $5million on the direction of the Hon’ble Madras High Court in the Credit Suisse case and there is no adverse financial liability on the Company. The settlement involves payment of settlement amount over a mutually agreed period of time.”
An e-mail query sent to Credit Suisse did not elicit a response at the time of publication.
In the context of the airline’s dispute with Credit Suisse and a potential liquidation, Tamil Nadu-based City Union Bank marked the account of SpiceJet as special mention account-1 (SMA-1), while deciding to withdraw the Rs 100 crore bank overdraft facility extended to the airline. Lenders declare an account SMA-1 when interest or principals on loans are overdue for between 31-60 days.