NEW DELHI: Cash-strapped SpiceJet is all set to receive an additional Rs 1,000 crore under the revised Emergency Credit Line Guarantee Scheme (ECLGS), which may help the airline wither the current headwinds. The Ajay Singh-promoted airline has already received a credit of Rs 350 crore under the scheme.
“The additional funding will help SpiceJet to clear all statutory dues, lessor payments, induct brand new MAX planes, among other things. The funding settles the survivability debate once and for all,” said a senior SpiceJet executive. Shares of the airline rose 10.14% to Rs 42.35 during the day on the BSE. It ended at Rs 41.85 apiece, higher by 8.84%.
The fresh funding option for the carrier comes two days after the Department of Financial Services (DFS), Ministry of Finance, modified the ECLGS to enhance the maximum loan amount eligibility for airlines under ECLGS 3.0 to 100% of their fund based or non-fund-based loan outstanding as on the reference dates or Rs 1,500 crore, whichever is lower.
As per an aviation analyst with a leading consultancy firm, SpiceJet is in dire need of funds to remain sustainable and the changes made in the ECLGS scheme goes well for the airline. “It needs more funds than Rs 1,000 crore to fix its problems,” he said, requesting anonymity. The scheme, introduced during the covid-19 pandemic, helps various sectors, entities get credit at a concessional rate of 7%.
Ajay Singh, Chairman and MD of SpiceJet, said the speed and urgency with which the aviation and finance ministries have been taking up issues and problems being faced by airlines post Covid and due to the record high oil prices is nothing but remarkable.