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Promoter has refused to infuse funds, SpiceJet informs Delhi High Court

SpiceJet has informed the Delhi High Court that its promoter Ajay Singh has declined to infuse fresh funds in the debt-strapped airline.

"Singh has expressed his inability to inject further funds in the Company in his individual capacity. SpiceJet has also approached its bankers for additional credit facilities and other mechanisms for raising funds," SpiceJet said in the court filing.

The court proceedings are related to a dispute with aircraft manufacturer De Havilland. The court filings also reveal that the Reserve Bank of India has rejected the airline's request for an extension of the timeline and ratio on the "one-time restructuring". The airline has sought fresh financing of approximately Rs.570 crore from its existing lenders, the court document shows.

However, when contacted, a SpiceJet spokesperson said, "Singh is committed to the well being and sustenance of Spice Jet and has already collateralised his considerable stake in the company with various banks. In fact, he has also offered to infuse more funds as part of SpiceJet's proposal to bankers."

When asked about RBI's decision on OTR, the spokesperson added: "The matter with regard to RBI OTR is nothing specific to SpiceJet and there are many other industries which are governed by the same."

In response to questions on raising funds, the spokesperson said that: "SpiceJet is a low debt company with significant collateral with banks. The company has requested banks to allow it to utilise fully collateralised un utilised limits."

The airline is looking to its existing bankers for additional funding to the tune of approximately Rs.570 crore.

According to documents submitted by SpiceJet to the Delhi High Court, De Havilland has refused to give the debt-strapped airline an extension to pay the £5,000,000 penalty. Earlier this month, SpiceJet had requested an extension of the timeline by 60 days and its request for the provision of alternative security.

The De Havilland dispute is regarding the non-payment of tranches on aircraft deliveries.

The aircraft maker approached the UK Court to seek remedies on the said dues. The UK court passed an order in favour of De Havilland and directed SpiceJet to pay £5 million within 28 days. The aircraft maker then moved an application in the Delhi High Court to implement the same.

In this regard, the SpiceJet spokesperson said that "The matter with regard to De Havil land is pending adjudication before appropriate forum and the Company is contending and assailing the same. Since the same is sub-judice, we do not think it will be appropriate to get into its specifics. Ad equate disclosure with regard to the same already forms part of our notes to the accounts."

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