The Centre has come out with a bailout package for private low-cost carrier SpiceJet that includes requesting banks to give working capital to the airline and asking oil companies and airports to give it time to clear dues.
A statement issued by the Government late in the evening states that Indian banks will be requested to give working capital loan to the airline based on the assurances of its promoters.
In addition, the Government has requested banks or financial institutions to lend up to ₹600 crore, backed by a personal guarantee of the SpiceJet Chairman. SpiceJet’s total outstanding debt stood at ₹1,600 crore on December 5. The “package” comes a day after SL Narayanan, Chief Financial Officer, Sun Group, which owns the airline, and Sanjiv Kapoor, Chief Operating Officer, SpiceJet, met senior officials of the Civil Aviation Ministry to explain the predicament that SpiceJet is in.
“This (₹600 crore) should be paid immediately after securing the long-term investment, which will take around eight weeks to consummate,” the statement adds.
In addition, the Finance Ministry will be requested to permit external commercial borrowing for working capital for SpiceJet as special dispensation as was done in the 2012 when a similar crisis had arisen in the aviation sector.
Credit for oilThe public sector oil companies will be requested to give credit to the airline for the oil that it lifts for up to 15 days. With the daily oil off-take of the airline being about ₹5 crore, this would amount to about ₹75 crore. This step is being considered as the airline’s dues to public sector oil companies stood at ₹14 crore on December 15.
Besides, the Director General of Civil Aviation will be asked to allow the airline to take bookings up to March 31 next year while airport operators will be requested to allow a grace period of 15 days for SpiceJet to make payments.
Earlier in the day, Mahesh Sharma, Minister of State for Civil Aviation, told newspersons that several departments of the Government were working to find out what could be done to help SpiceJet. He indicated that Ashok Gajapathi Raju, Minister for Civil Aviation, had been in touch with the Ministers of Finance and Oil to ensure that something was done for the sector and not for any one airline.
Sharma had, however, said the Government was not working on any package for any particular airline.