Low-cost airline SpiceJet has been ordered by the Delhi High Court to pay 380 crores to its erstwhile founder, Kalanithi Maran of the Sun Group. In addition, SpiceJet has been given four weeks by the court to file an affidavit outlining its assets. The airline recently announced a big rise in earnings for the December quarter, thus this decision is disappointing. Additionally, SpiceJet is now dealing with difficulties relating to payment issues with aircraft lessors.
Background to the Court Case
The Maran family and SpiceJet's current promoter, Ajay Singh, have been engaged in a protracted legal battle that led to the most recent High Court decision, dated May 29, 2023. Alleged contractual responsibilities between Maran and SpiceJet are the source of the dispute. Maran sued SpiceJet in 2017, claiming that by refusing to give him and his business, KAL Airways, convertible warrants, and preference shares, SpiceJet had caused financial damages.
Settlement of Payment and Future Interest
SpiceJet finally paid Maran a primary sum of Rs. 579.08 crores after a protracted court dispute. The interest portion, however, was still pending. The interest was 242 crore as of October 2020, rose to 362 crore by February 2023, and finally reached 380 crore.
Impact on the Financial Performance of SpiceJet
Following the court's ruling, SpiceJet's stock started to rise, trading at 26.85, representing a 3.95% gain. However, the 380 crore payment's financial ramifications and continuing legal disputes may have an impact on the airline's profitability in the future.
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