No question of filing for insolvency, rumours completely baseless: SpiceJet’s Ajay Singh

MUMBAI - SpiceJet Ltd has clarified and assured investors that it has no plans to file for insolvency even as it faces a financial crunch. “There is absolutely no question of filing for insolvency. Any rumours regarding the same is completely baseless. We are focussed firmly on reviving our grounded fleet and getting more and more planes back into the air,” Ajay Singh, Chairman and Managing Director, was quoted as saying in the release.

The assurances did little to convince Dalal Street, as the stock was trading 1% lower on the BSE. The statement comes in the backdrop of Go First Airlines filing for voluntary insolvency resolution process with the National Company Law Tribunal as it was forced to cancel all flights due to non-payment of dues to oil companies.


SpiceJet has initiated the process of reviving its grounded fleet with the $50 million funds received from the government’s emergency credit line guarantee scheme (ECLGS) and internal cash accruals.

Earlier this week, news reports said that lessors have approached aviation regulator DGCA for deregistration of three planes of SpiceJet. Many aircraft of the budget carrier are grounded due to various reasons.

However, SpiceJet said that it is firmly focussed on its business and remains in active talks with investors to raise funds.

Last week, SpiceJet had announced plans to invest Rs 400 crore to revive 25 grounded aircraft, using the government’s emergency credit line.

This will help the airline capitalise and make the most of the upcoming peak travel season. In February, aircraft lessor Carlyle Aviation Partner picked up 7.5% stake in SpiceJet as the struggling airline restructured its outstanding dues of over $100 million to Carlyle and its affiliates through equity and convertible debentures.

Amidst financial woes, SpiceJet saw a major hit to its business. In March, its market share plunged to 6.4% from 7.1% in February. Its passenger load factor dropped to 92.3% from 94.1% in February.

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