NEW DELHI: Struggling-to-survive SpiceJet has admitted not paying about Rs 220 crore Tax Consultant that was deducted from employees’ pay between April 2020 and Aug 2023 to tax authorities and over Rs 135.3 crore PF to staffers in the same period. The airline’s preliminary placement document (PPD) filed with BSE says about Rs 72 crore TDS for AY 2009-10 to 2013-14 as disputed. Additionally the LCC has listed significant dues to customs, service tax and GST as “disputed”. The airline is trying to raise Rs 3,000 crore by the month-end to remain afloat.
The Rs 350 crore dues of PF & TDS were inadvertently reported as Rs 3,500 crore and the error is regretted.
“Owing to our financial stresswe have been in alleged default under several of our aircraft lease agreements leading to grounding of substantial part of our aircraft fleet. Such alleged defaults have also led to our aircraft lessors and other vendors to initiate legal or enforcement proceedings against us including proceedings under the Insolvency and Bankruptcy Code, 2016, enforce bank guarantees, appropriate security deposits or repossess our aircraft, which has and may in the future adversely affect our business, financial condition and results of operations,” the PPD says.
The airline has grounded more than half of its fleet. “As of June 30, 2024, of our total fleet size of 64 aircraft, 36 aircraft (constitutive to 56.25 per cent of total fleet size) are grounded, owing primarily to alleged default in payment of dues to the aircraft lessors and lack of maintenance on such aircraft due to financial constraints and/or non-availability of components and spare parts. Due to the smaller size of our fleet after the pandemic, our traffic and market share have both declined,” it says.
The airline says it plans to utilize a “substantial portion of the proposed capital raise” through this PPD for un-grounding the fleet. “We believe that our prospects for servicing our existing debt and achieving future profitability depend in large part on our ability to attain critical mass in terms of fleet size, projected passenger volumes and projected yield levels. While we are taking steps to get our grounded aircraft operational and add additional aircraft through various leasing arrangements, we cannot assure you that by when all such aircraft will be operational. In case, our aircraft continue to remain grounded or gets grounded in future, it will have an adverse impact on our operations, cashflows and financial position,” it says.
The airline has incurred losses in last three fiscals and its net worth is negative. “We cannot assure you that such losses will not be incurred in the future…. as of (June 30, 2024) we had negative retained earnings of Rs 7,728.4 crore and negative net worth of Rs 5,022.2 crore,” it says.
The Rs 350 crore dues of PF & TDS were inadvertently reported as Rs 3,500 crore and the error is regretted.
“Owing to our financial stresswe have been in alleged default under several of our aircraft lease agreements leading to grounding of substantial part of our aircraft fleet. Such alleged defaults have also led to our aircraft lessors and other vendors to initiate legal or enforcement proceedings against us including proceedings under the Insolvency and Bankruptcy Code, 2016, enforce bank guarantees, appropriate security deposits or repossess our aircraft, which has and may in the future adversely affect our business, financial condition and results of operations,” the PPD says.
The airline has grounded more than half of its fleet. “As of June 30, 2024, of our total fleet size of 64 aircraft, 36 aircraft (constitutive to 56.25 per cent of total fleet size) are grounded, owing primarily to alleged default in payment of dues to the aircraft lessors and lack of maintenance on such aircraft due to financial constraints and/or non-availability of components and spare parts. Due to the smaller size of our fleet after the pandemic, our traffic and market share have both declined,” it says.
The airline says it plans to utilize a “substantial portion of the proposed capital raise” through this PPD for un-grounding the fleet. “We believe that our prospects for servicing our existing debt and achieving future profitability depend in large part on our ability to attain critical mass in terms of fleet size, projected passenger volumes and projected yield levels. While we are taking steps to get our grounded aircraft operational and add additional aircraft through various leasing arrangements, we cannot assure you that by when all such aircraft will be operational. In case, our aircraft continue to remain grounded or gets grounded in future, it will have an adverse impact on our operations, cashflows and financial position,” it says.
The airline has incurred losses in last three fiscals and its net worth is negative. “We cannot assure you that such losses will not be incurred in the future…. as of (June 30, 2024) we had negative retained earnings of Rs 7,728.4 crore and negative net worth of Rs 5,022.2 crore,” it says.
