New Delhi: Coming to the rescue of the crisis-ridden budget airline SpiceJet, the Civil Aviation Ministry said it may request Indian banks/financial institutions to extend loans of upto Rs 600 crore to the airline as part of measures to keep the carrier functional.
The Civil Aviation Ministry has said that it will also request the Finance Ministry to permit external commercial borrowing for working capital as special dispensation.
These and many more suggestions, have been approved by Civil Aviation Minister Ashok Gajapathy Raju after due consideration as a shut down would have been a major setback to the aviation sector, it said.
The measures, however, comes with a rider that the beleagured airline will commit capital infusion at the earliest.
The steps came a day after SpiceJet's Chief Operating Officer Sanjiv Kapoor, along with Sun Group CFO SL Narayanan, met Raju and DGCA Prabhat Kumar and sought the government's help to overcome the crisis.
"Indian banks may be requested to give some working capital loan based on the assurances of the promoter. Banks or financial institutions to lend up to Rs 600 crore backed by a personal guarantee of the Chairman, SpiceJet," the release said.
This should be paid immediately after securing the long- term investment which will take around eight weeks to consummate, it said.
In addition, the Ministry of Finance will be requested to permit ECB for working capital as special dispensation as was done in the 2012 to help the airline wriggle out of the financial morass.
At the same time, the airline, with total liabilities standing at Rs 2,000 crore, including dues to the public sector oil firms and the Airports Authority of India (AAI), may get credit facility for upto 15 days from the oil firms and AAI, the government said.
Earlier in the day, Minister of State for Civil Aviation Mahesh Sharma, while ruling out any bailout package to any private airline, had said, "Something (solution) is being worked out in the larger interest of aviation industry and the passengers."
The Kalanithi Maran-promoted low-cost airline, plunged into crisis early this month after aviation regulator Directorate General of Civil Aviation (DGCA) withdrew 186 slots of the carrier following large-scale cancellation of its flights due to paucity of funds.
It was directed not to take bookings of flights over one month, disburse the November unpaid salary to its employees as well as file a "convincing schedule" by December 15 to clear its dues to various vendors, including airports and oil companies.
The airline has been losing money and Maran, who owns majority stake in the airline, has already brought in about Rs 250 crore in the airline this year but to no avail.
Government sources say the airline urgently requires about Rs 1,400 crore to keep it off the ground.
In a relief to SpiceJet, DGCA earlier today temporarily removed the 30-day booking restriction on the airline.
"The one-month booking ceiling imposed on SpiceJet has been taken off and the airline allowed to book tickets beyond 30 days till March next year," the sources said.
SpiceJet was also given a breather after the state-run Airports Authority of India allowed it some time to clear Rs 200 crore dues following Maran giving a personal guarantees to infuse more funds.
(With inputs from PTI)