SpiceJet likely to get funds under govt's credit guarantee scheme next week

SpiceJet, which is facing financial headwinds, is likely to receive around Rs 225 crore under the government's credit guarantee scheme next week, according to a source.

Hit by high fuel prices and rupee depreciation, the budget carrier on Wednesday posted a net loss of Rs 789 crore for June quarter and also said its board has approved raising up to Rs 2,000 crore.

On Friday, the source said the airline is expected to receive around Rs 225 crore next week under the Emergency Credit Line Guarantee Scheme (ECLGS).

Under the scheme, announced in May 2020 in the wake of the pandemic to help various sectors, entities will get credit at a concessional rate of 7 per cent.

On August 17, the Union Cabinet approved the enhancement in the limit of ECLGS by Rs 50,000 crore to Rs 5 lakh crore. The additional amount is being earmarked exclusively for enterprises in hospitality and related sectors.

The source also said that a new Chief Financial Officer (CFO) is expected to join the airline next week.

On Wednesday, the airline said its Chief Financial Officer Sanjeev Taneja has resigned.

There was no immediate response from the airline on ECLGS funding.

On August 23, SpiceJet Chairman and Managing Director Ajay Singh said the airline was doing the utmost to work through the stress that it has faced and the strategy is to raise resources.

"We are doing it by way of the government-supported scheme ECLGS, getting new aircraft from Boeing and therefore through the SLB (sale and lease back) process, exploring options for fundraise... we are exploring all options," he had said.

Singh also said the airline was looking at investments from external parties, including airlines.

Without divulging specific details, he said the carrier would do everything to ensure it remains a strong and vibrant player.

In recent months, SpiceJet has been facing turbulent times, including financial headwinds. In July, the regulator directed the airline to operate only 50 per cent of flights in the wake of many of its planes facing technical issues.

Shares of SpiceJet rose marginally to close at Rs 45.10 apiece on Friday on the BSE.