SpiceJet may get Rs 225 crore ECLGS lifeline next week

NEW DELHI: Struggling to survive SpiceJet may receive about Rs 225 crore lending under “emergency credit line guarantee scheme” (ECLGS) next week.
Sources in the airline claim this money will be “used to clear statutory dues and lessor payments” and that a new chief financial officer (CFO) will join next week.
“Fund raise process has started in full earnest,” the source added.
The airline says delivery of new Boeing 737MAX will start soon. However, it has been claiming that since last winter.
Industry sources say the question is whether it can manage to finance those aircraft.
“Lessors know the situation in airlines and are extra cautious when it may seem that an airline is doing sale and lease back of aircraft only to rase funds through that methods,” said an industry insider.
This Wednesday SpiceJet had said in a regulatory filing that its chief financial officer Sanjeev Taneja has resigned with effect from August 31.
The airline lost Rs 1,725 crore in FY 2022, against a loss of Rs 998 crore in the previous fiscal. It has delayed payment of August salaries to staff.
Six Boeing 737s leased to SpiceJet have been de-registered by the Directorate General of Civil Aviation over the last one month under the provisions of Irrevocable De-registration and Export Request Authorisations (IDERA). This requires aviation regulators to de-register aircraft within five days from the name of a third party in cases like default of lease rentals.
SpiceJet promoter Ajay Singh has for months been trying to raise funds.
The auditor’s remarks with the airline’s result this Wednesday had “cast significant doubt about the company’s ability to continue as a going concern… company’s accumulated losses (as on March 31, 2022) amount to Rs 5,912.6 crore which have resulted in complete erosion of its net worth… current liabilities have exceeded its current assets by Rs 6,408.7 crore as at March 31, 2022…..”

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