Millennium Post

After PSBs lose Rs 8.5K-cr in KF, Govt to force Rs 600 cr for SpiceJet

Coming to the rescue of crisis-ridden airline SpiceJet, the Civil Aviation Ministry on Tuesday said it may request public sector banks (PSBs)/ financial institutions (FIs) to extended loans of up to Rs 600 crore to the airline as part of “measures to keep the carrier functional”. 

Besides, it will also request the Finance Ministry to permit external commercial borrowing (ECB) for working capital as special dispensation, a Ministry release said here. These steps have been approved by Civil Aviation Minister Ashok Gajapathy Raju after due consideration as “a shutdown would have been a major setback to the aviation sector”, it said.

At the same time, the airline, with total liabilities standing at Rs 2,000 crore including dues to the public sector oil firms and the Airports Authority of India (AAI), may get credit facility for upto 15 days from the oil firms and AAI, the government said. Incidentally, several public sector banks had earlier been prompted by the Government to lend a total of Rs 8,500 crore to Vijay Mallya-led Kingfisher Airlines which is now bankrupt and closed.

Tuesday’s steps came a day after SpiceJet COO Sanjiv Kapoor and Sun Group CFO S L Narayanan met Raju and DGCA Prabhat Kumar and sought the Government’s help to overcome the crisis. 

“Indian banks may be requested to give some working capital loan based on the assurances of the promoter. Banks or financial institutions to lend up to Rs 600 crore backed by a personal guarantee of the Chairman, SpiceJet,” the release said.
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