The civil aviation ministry pushed for a bailout of SpiceJet on Tuesday, calling on banks to give the carrier up to Rs 600 crore in working capital loans and help it tide over the crisis until the airline can tie up long-term investment, which is expected to come through in eight weeks.
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 seemed to be frustrated by banks not being keen on providing loans after their experience with the grounded Kingfisher Airlines, which defaulted on debt. An executive of the parent Sun Group said there would be no alternative but to "mercy kill the airline if the current situation continues". The ministry announcement would have therefore come as a big relief to the carrier.
"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, Spice-Jet. This should be paid immediately after securing the long-term investment, which will take around eight weeks to consummate," the ministry said in a release.
17/12/14 Anirban Chowdhury & Mihir Mishra/Economic Times
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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 seemed to be frustrated by banks not being keen on providing loans after their experience with the grounded Kingfisher Airlines, which defaulted on debt. An executive of the parent Sun Group said there would be no alternative but to "mercy kill the airline if the current situation continues". The ministry announcement would have therefore come as a big relief to the carrier.
"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, Spice-Jet. This should be paid immediately after securing the long-term investment, which will take around eight weeks to consummate," the ministry said in a release.
17/12/14 Anirban Chowdhury & Mihir Mishra/Economic Times
