In what comes as a blow to domestic airline SpiceJet, the Delhi High Court on Monday ordered the airline to deposit Rs 243 crore within six weeks. This is in relation to the ongoing dispute with its former owner Kalanithi Maran and his company, KAL Airways.
The Rs 243 crore is in addition to the Rs 579 crore that SpiceJet has already deposited with court and is reportedly the interest payable on this amount. If the cash-strapped airline fails to deposit the amount within six weeks, Delhi HC said that Maran will be able approach the court to seek status quo on SpiceJet’s shareholding, which will prevent the company from being able to raise more funds.
The dispute between SpiceJet and Maran dates back to 2015, when Maran dragged the airline to court over non-issuance of warrants in his favour after the ownership of the airline was transferred to Ajay Singh.
“Judgement Debtor (SpiceJet and promoter Ajay Singh) is directed to deposit Rs 242.93 crore as post-award interest sum within a period of six weeks. If the amount is not deposited, the decree holder (in this case Kalanithi Maran and KAL Airways) shall be at liberty to seek directions to maintain status quo with respect to shareholding of SpiceJet and Ajay Singh,” the order on Monday read.
At the time of the deal in 2015, Maran and KAL transferred the 350.4 million equity shares they owned in SpiceJet to Ajay Singh for Rs 2. This added up to a 58.46% stake in the airline.
Maran claimed that he and KAL were supposed to get redeemable warrants for the amount they spent on the airline’s operating costs and payment of debt. Maran accused the airline and Ajay of not issuing 180 million share warrants and preference shares to him and dragged them to court demanding the same.
Following this, Delhi HC directed SpiceJet to Rs 579 crore in five equal monthly instalments, which SpiceJet challenged, but was rejected.
However, the airline has been facing a severe cash crunch due to the COVID-19 pandemic. It has a cash balance of only Rs 42 crore and a net worth of Rs 1,580 crore at the end of March 31, 2020.