“SpiceJet Exposes Financial Strain: ₹355 Crore in Unpaid Provident Fund and Tax Obligations”
SpiceJet, the troubled Indian airline, is grappling with a severe financial crisis, as recent disclosures reveal that the carrier has failed to pay ₹355 crore in Provident Fund (PF) and tax dues. The revelations come amidst ongoing financial difficulties that have led the airline to take drastic measures, including placing 150 cabin crew members on unpaid leave for three months.
SpiceJet, the troubled Indian airline, is grappling with a severe financial crisis, as recent disclosures reveal that the carrier has failed to pay ₹355 crore in Provident Fund (PF) and tax dues. The revelations come amidst ongoing financial difficulties that have led the airline to take drastic measures, including placing 150 cabin crew members on unpaid leave for three months.
According to documents filed with the Bombay Stock Exchange, SpiceJet has accumulated substantial unpaid dues. Specifically, the airline has not disbursed ₹135.3 crore in Provident Fund contributions for the period between April 2020 and August 2023. In addition, it owes ₹220 crore in Tax Deducted at Source (TDS) for the same timeframe. This is compounded by nearly ₹72 crore in disputed TDS payments and ₹84.5 crore in disputed Goods and Services Tax (GST) payments, with disputes dating back to as early as April 2006.
The airline has also encountered issues with service tax, customs duties, and associated penalties. SpiceJet’s spokesperson defended the company’s financial management, stating that while delays have occurred due to financial constraints, the airline is committed to clearing its dues. The company assures that all financial information is transparent and publicly accessible.
To address its financial woes, SpiceJet plans to raise ₹3,000 crore through the sale of securities to institutional buyers. The airline has set a floor price of ₹64.79 per share for this sale, with a potential discount of up to five percent subject to shareholder approval. The funds raised will be allocated towards clearing statutory dues, settling outstanding liabilities, and paying employee and airport-related fees.
Additionally, SpiceJet is in the process of restructuring its operations. Earlier this month, the Carlyle Group’s commercial aviation investment and servicing unit agreed to write off ₹4 crore in lease arrears and convert ₹3 crore into equity. The airline intends to use ₹601.5 crore from the new funds for clearing TDS and PF dues, with additional amounts allocated for settling airport-related fees and outstanding liabilities linked to aircraft and engine lessors.
Currently, 36 of SpiceJet’s 58 aircraft are grounded, affecting its operational capacity. The airline aims to use part of the proceeds to reactivate 24 grounded aircraft, including the B737 and Q400 models, and to introduce new aircraft to expand its fleet and service network. SpiceJet’s operational fleet has dwindled from 74 aircraft in 2019 to just 28 in 2024, underlining the airline’s struggle to stay competitive in the challenging aviation market.
Sources By Agencies
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