SpiceJet likely to get Rs 225 crore next week under ECLGS to clear dues

The airline has been making losses for the last 4 years. Moreover, it is currently operating less than 50% flights, following the July 27 order DGCA in the wake of a spate of incidents.

SpiceJet is likely to get around Rs 225 crore next week under the central government's Emergency Credit Line Guarantee Scheme (ECLGS) to clear its dues, sources said on Friday.

The airline has been making losses for the last four years. Moreover, it is currently operating fewer than 50 per cent flights, following the July 27 order of Directorate General of Civil Aviation (DGCA) in the wake of a spate of incidents.

Ajay Singh, SpiceJet's chairman and managing director, had on Wednesday said that the airline will shortly be engaging with investment bankers to raise up to $200 million.

Sources on Friday said the company is likely to get Rs 225 crore under ECLGS to clear its dues with lessors and other institutions.

The Centre in 2020 had started the ECLGS to provide collateral-free and government-guaranteed loans to businesses affected by the coronavirus pandemic. 

Under ECLGS, an aviation sector company can get a loan of up to 50 per cent of its total credit outstanding across all lending institutions. However, the amount borrowed by the company can not be more than Rs 400 crore.

SpiceJet incurred net losses of Rs 316 crore, Rs 934 crore, Rs 998 crore, and Rs 1,725 crore in FY19, FY20, FY21 and FY22, respectively.