SpiceJet Merchandise Pvt. Ltd, a subsidiary of no-frills carrier SpiceJet Ltd, on Wednesday agreed to make pending payments to public sector lender Canara Bank regarding a two-year-old acquisition, two people with direct knowledge of the matter told Mint.
“SpiceJet Merchandise was the resolution applicant for a company called Miditech Pvt. Ltd, in which Canara Bank was part of the committee of creditors (CoC) with more than 90% exposure,” one of the people mentioned above said.
“SpiceJet Merchandise had paid only ₹1 crore (in 2019) of the ₹2 crore they were supposed to pay for the company. As there was a delay in payment, Canara Bank had filed a case at the National Company Law Tribunal (NCLT) (on 30 August 2021) asking the company to either pay up or withdraw the resolution application,” the person said.
SpiceJet Merchandise on Wednesday informed NCLT that it will pay the remaining amount.
SpiceJet Ltd has also approached flight catering company SkyGourmet Catering Pvt. Ltd, which dragged the airline to the NCLT earlier this year to recover dues of more than ₹1.3 crore, for a settlement. A NCLT order on the matter dated 29 September states that the “CD (corporate debtor/SpiceJet Ltd) had approached the operational creditor (SkyGourmet Catering) for settlement and this contention is also supported by the operational creditor”.
A copy of the order has been reviewed by Mint.
“Due to the impact of covid, SpiceJet Merchandise Pvt. Ltd amended the implementation timeline, which was taken on record by NCLT in today’s hearing,” a SpiceJet spokesperson said. “SkyGourmet and SpiceJet have agreed to amicably settle the matter. The matter will be finally withdrawn by the parties.”
Apart from the NCLT cases, one of SpiceJet’s lessors Goshawk and its trustee, Wilmington Trust SP Services Dublin Ltd, have filed an injunction against the airline transferring its assets to a separate company until the airline clears dues on lease rentals for three aircraft.
In an interim order dated 22 September, the Delhi high court has restrained the airline from transferring its assets to a separate company, thus casting a shadow over the airline’s plans to form a separate company out of its cargo and logistics business.
SpiceJet had earlier in September said that it has received shareholders’ approval to transfer its cargo and logistics services business to its subsidiary, SpiceXpress and Logistics Pvt. Ltd (SpiceXpress), which will result in a one-time gain of ₹2,555.77 crore for the airline.
The court is slated to hear the case next on 29 November.
The transfer of the logistics and cargo business into a separate entity in a slump sale is expected to wipe out a substantial portion of the company’s negative net worth, SpiceJet had said in September.
A slump sale is the transfer of one or more undertakings for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales.
The move by SpiceJet to segregate its profitable logistic and cargo business will help the airline raise funds at a time the airline’s auditors, Walker Chandiok & Co LLP, have raised doubts about the company’s ability to continue as a going concern, according to industry experts.
The no-frills airline’s mounting losses have resulted in complete erosion of the airline’s net worth with its liabilities exceeding its assets by ₹5,185.84 crore at the end of 31 March 2021.
Source: Mint