SpiceJet to receive Rs 225 crore under ECLGS next week

Indian budget airline SpiceJet is likely to receive Rs 225 crore next week as part of the government’s Emergency Credit Line Guarantee Scheme (ECLGS). The budget carrier will use this amount to clear statutory dues and other payments to lessors, reported news agency ANI quoting sources.

ECLGS, which was launched in 2020 by the centre as a special scheme in wake of COVID-19, aims to provide guaranteed coverage to banks and non-banking financial companies (NBFCs) enabling them to extend emergency credit to various industries for meeting their working capital requirements.

Earlier this week, Ajay Singh, chairman and largest shareholder of SpiceJet, said the airline is looking to raise Rs 2,000 crore through various means, including a stake sale. Currently, Singh holds nearly 60 per cent of stocks in the airline, of which around 44.24 per cent is pledged with lenders.

The process for raising funds has started in "full earnest", the sources added. SpiceJet is also likely to take delivery of new Boeing 737 Max jets “soon”, they added. The airline is planning to take delivery of at least seven Boeing 737 Max jets in 2022.

In addition to this, the agency also stated that the airline's new Chief Financial Officer (CFO) is also expected to join next week. Sanjeev Taneja, the previous CFO resigned from his post on August 31 2022.

The no-frills airline, in a stock filing, stated: “The Board (of Spicejet) has also identified the candidate for appointment as Chief Financial Officer of the Company. The vacancy shall be filled in September 2022 and the necessary disclosure regarding such appointment shall be made upon completion of all formalities.”

SpiceJet, in terms of earnings, observed Rs 789 crore net loss in Q1 FY22, as the company's business was severely impacted due to high fuel prices and a depreciating domestic currency. In Q4 FY22, the airline’s net loss stood at Rs 729 crore.

For the full fiscal year 2021-22, the net loss surged 73 per cent to Rs 1,725 crore from Rs 998.30 crore in the comparable period.