SpiceJet has offered to pay at least ₹100 crore to the Airports Authority of India before March 31 next year towards unpaid dues of ₹225 crore for using airport services, in a last-ditch effort to check the AAI from encashing the airline’s bank guarantee, multiple government officials said.
The proposal was discussed at a meeting between SpiceJet officials and Pradeep Singh Kharola, Secretary, Ministry of Civil Aviation, on Tuesday.
“SpiceJet requested an urgent meeting with Kharola to propose and firm up a payment plan which would put lesser pressure on the airline’s current financial health,” one of the government officials said.
During the meeting, it was decided that SpiceJet would pay a lump sum of ₹100 crore before March 31, unlike its earlier proposals to pay just ₹10 crore every month.
“The ₹100 crore will include ₹20 in crore cash for the dues along with interest payment and the TDS dues,” the official said. The plan has to be ratified by the AAI board.
If the total dues of an airline exceed 75 per cent of the bank guarantee provided by it, the AAI can encash the bank guarantee, according to the credit policy of the authority.
BusinessLine had reported that the no-frills carrier owed some ₹147 crore as principal amount and ₹78 crore as an interest to the AAI, while the bank guarantee is for ₹155 crore.
On June 30, the AAI put SpiceJet on a cash-and-carry mode for a daily fee of ₹1.1 crore and asked the airline to submit a payment plan. In response, SpiceJet submitted a payment plan spread over two years, which was not acceptable to AAI and it moved to encash the bank guarantee.
On December 4, SpiceJet moved the Delhi High Court seeking a stay on the encashment of its bank guarantee.
The airline then submitted a plan to pay ₹10 crore each month, which was rejected by the AAI board.
During a hearing on the case, Justice Navin Chawla asked SpiceJet to work out an acceptable amount that could be paid each month and clear off a large part of the dues by March 31.
The matter will now be heard on January 18.
While it is unclear how SpiceJet plans to clear these dues, BusinessLine had reported that the airline had sought one-time debt restructuring and has also requested a ₹500-crore working capital in order to tide over the Covid-19 pandemic induced stress from YES Bank. The low-cost carrier had also submitted a revival plan and its financial documents to the lender.
YES Bank is likely to respond to Spicejet’s revival plan by January end, sources said.
Mails sent to SpiceJet and Civil Aviation Secretary Kharola remained unanswered till the time of going to press.