SpiceJet rallies over 7% as govt pushes banks for Rs 600 crore loan

NEW DELHI: SpiceJet Ltd rallied as much as 7.5 per cent in trade on Wednesday after the civil aviation ministry pushed for a bailout, calling on banks to give the carrier up to Rs 600 crore in working capital loans.

The working capital loan will help the airline tide over the crisis until it can tie up long-term investment, which is expected to come through in eight weeks.

At 09:20 a.m.; SpiceJet pared some of the morning gains but was still trading 3.6 per cent higher at Rs 14.40. It hit a low of Rs 14.15 and a high of Rs 14.95 in trade today.

This came a day after Spice-Jet got a reprieve based on assurances from the promoters to guarantee loans. Before the evening announcement by the ministry, the promoters found it difficult to convince the banks for loans.

On Tuesday, the ministry allowed SpiceJet to open bookings until March 31, relaxing the advance-booking limit of one month that had been imposed on December 5, ET reported.

The ministry also asked the Airports Authority of India (AAI) and oil companies to provide the airline 15 days to pay its dues, added the report.

The carrier's financial woes aren't as bad as those of Kingfisher, ET reported quoting a Sun Group executive. SpiceJet's short-term loans - those not backed by aircraft - add up to just Rs 230 crore, "much lesser than Kingfisher's Rs 7,800 crore", according to the executive. SpiceJet's total long-term liabilities, including dues to lessors, is Rs 2,000 crore.