After a rise of over 12% in the past week, shares of Ajay Singh-led Spice Ltd fell 4.65% today despite the positive broader market and the company's announcement in relation to the repayment of dues to the airline's former promoter Kalanithi Maran’s Kal Airways Private Ltd and international bank Credit Suisse.

SpiceJet, in a statement today, says it made a payment of ₹77.5 crore to Kalanithi Maran and will complete the payment of ₹100 crore by paying an additional amount of ₹22.5 crore on September 12, 2023, as per the directions of the Delhi high court.

The development comes a few days after the Delhi High Court on August 24, 2023, ordered SpiceJet chairman and managing director Ajay Singh to pay ₹100 crore to Maran by September 10. The high court also warned Singh it could attach the airline's assets if the payment was not made by the said date.

SpiceJet says it acknowledges the legal process and is committed to "complying with all court directives and obligations" in the Credit Suisse case. The company "will make the payment of $1.5 million as per the court directive".

Of the entire payment, a third is part of a monthly settlement plan the airline opted for, while the rest is “unpaid dues” for failure to make payment since last year.

"SpiceJet remains committed to the highest standards of transparency and legal compliance," says the airline. To date, SpiceJet has already paid a total of $8 million to Credit Suisse.

The said liability is an “old one, and pre-dates the current promoter taking over the company”, says the aviation firm.

Later in the day, SpiceJet issued another statement, saying it has completed the payment of ₹100 crore to Kal Airways. "While a payment of INR 77.5 crore had been made to Kal Airways till September 11, the remaining INR 22.5 Crore was paid today."

The SpiceJet stock, meanwhile, opened a gap up at ₹41.50 and fell to intra-day low of ₹36.38 on the BSE. At the time of filing of the report, 42.84 lakh shares were trading on the counter against the two-week average of 71.40 lakh. At the current share price, SpiceJet's m-cap stands at ₹2,284 crore.

The no-frills airline has seen a consistent drop in its market share over the past few months. Its market share dropped to 4.2% in July from 4.4% in June. Shares of SpiceJet, however, surged 12.56% in the past month; and 9.87% in the past six months; while they fell 2.80% and 16.03% in the year-to-date and one-year periods, respectively.

The dispute between the two parties dates back to 2015 when Kalanithi Maran first approached Ajay Singh who had been associated with the airline previously. The ownership of the airline was transferred to Singh for ₹2. At the time of transfer, the company had debt and liabilities outstanding of over ₹3,500 crore with immediate payables of around ₹2,200 crore and its Boeing fleet was reduced from 41 to 17 aircraft.

To keep the debt-laden carrier afloat, Singh asked the Marans to put in a substantial amount of money to clear up dues. It is this ₹578 crore – invested by the Sun Group at the time – which is now the main bone of contention.

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