City Union Bank (CUB) said that the no-frills airline SpiceJet has agreed to settle its dues with the bank in a phased manner that will see re-payments happening till June next year. SpiceJet has been servicing the interest dues regularly and interest had been paid up to July 2022.
“The airline immediately paid Rs 3 crore dues in July 2022 and pledged two crore share with us as collateral owned by the promoter of SpiceJet. The market value is more than almost around Rs 90 crore plus currently,” N Kamakodi, MD and CEO, City Union Bank, told analysts during an earnings call.
SpiceJet had requested the bank to renew their existing facility and terms and conditions for such renewal were mutually agreed upon. Apart from the payment in July and the pledging of the shares, the company, as part of the pact, has agreed to pay additional Rs 12 crore before the end of August 2022 and agreed to settle the balance dues in a phased manner before June 2023.
He said the SpiceJet account has been renewed on August 8, 2022, with a limit of Rs 97 crore since the renewal plan was agreed upon and the account is now moved out of the SMA status. “Till third quarter of FY’22, we have made a provision of Rs 85 crore and further we have made a contingency provision of Rs 12 crore in first quarter of FY’23. So, we have made a contingency provision of Rs 97 crore against the total outstanding of Rs 97 crore,” he said.
14/08/22 Sajan C Kumar/Financial Express
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