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The Finance Ministry has extended the last date of disbursement for fund-based facility and utilisation of the first tranche for non-fund-based facility for airlines under the Emergency Credit Line Guarantee Scheme 3.0 (ECLGS). The revised deadline has been moved from June 30 to July 15, providing a much-needed lifeline for struggling debt-ridden carriers, SpiceJet and GoFirst.
The revised guidelines were issued by the Ministry on June 29.
According to the notification reviewed by businessline, the Finance Ministry said, “We wish to inform that the last date of disbursement for fund-based facility and utilisation of the first tranche for non-fund-based facility for Airlines under ECLGS 3.0 (Extension) has been revised from June 30, 2023, to July 15, 2023. The other aspects of the guidelines remain unchanged.”
The Ministry further indicated that detailed operational guidelines and FAQs related to the extension have been made available.
The revised norms specify that the utilisation of the first tranche of the non-fund-based facility should be completed on or before July 15. The FAQ document also clarified that no pre-payment penalty would be charged by the lending institutions in case of early repayment.
The ECLGS scheme was introduced last year during Covid-19 to provide support to businesses, including airlines. In October, the Finance Ministry relaxed the scheme for airlines, enabling them to access up to 100 per cent of their fund-based or non-fund-based loan outstanding, with a cap of ₹1,500 crore or the actual outstanding amount, whichever is lower.
Previously, airlines were eligible only for 50 per cent of their outstanding debt or a maximum of ₹400 crore.
Beneficiaries
SpiceJet, low-cost carrier, has already initiated the process of reviving 25 grounded aircraft using funds from the ECLGS scheme and improved cash accruals. The airline has mobilised approximately ₹400 crore for this purpose, which will significantly enhance its operational capacity and revenue, Ajay Singh, MD and CEO of the airline had said in May.
Meanwhile, GoFirst, an airline currently undergoing insolvency proceedings, is awaiting ₹200 crore under the ECLGS scheme. The funds are expected to support its daily operations and contribute to overall financial stability.
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