SpiceJet may get Rs 225 crore next week under ECLGS

NEW DELHI: SpiceJet is likely to receive nearly Rs 225 crore next week as part of the central government’ Emergency Credit Line Guarantee Scheme (ECLGS) scheme, said sources privy to the development. The relief comes as the airline is seeking multiple options to generate cash amid mounting losses, spiraling dues and rising debt level. The funds, according to sources, will primarily be used to clear statutory dues and pay aircraft lessors.

SpiceJet, which reported Rs 1,725 crore loss in FY22 and Rs 789 crore in Q1FY23, earlier this week said that it will shortly be engaging with investment bankers for a potential raise of up to $200 million. Earlier this week, SpiceJet Chairman Ajay Singh had said the airline is looking to raise Rs 2,000 crore through various means, including a stake sale. Currently, Singh holds about 60% of stocks in the loss-making airline, of which 44.24% is pledged with lenders.

Under the ECLGS scheme, announced in May 2020 in the wake of the covid-19 pandemic to help various sectors, entities get credit at a concessional rate of 7%. 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.

Fundraising is very crucial to the airline as analysts and auditors have time and again raised their doubt over its ability to remain a going concern. SpiceJet is also likely to announce the appointment of new Chief Financial Officer next week after it informed Sanjeev Taneja has resigned.