Centre tries to bail out SpiceJet

Banks asked to consider lending Rs 600 crore provided on personal guarantee of the chairman

New Delhi: Going all out to help cash-strapped SpiceJet through a slew of measures, the Union government has asked banks to consider lending upto a whopping Rs600 crore to the ailing carrier provided it is backed by a personal guarantee of the chairman of SpiceJet.The government said Indian banks “may be requested to give some working capital loan based on the assurances of the (SpiceJet) promoter”.

The government has indicated that funding by banks may take place immediately after the airline secures a “long term investment” which could take about two months to fructify. SpiceJet has so far failed to get a new investor on board.The Union government also directed aviation regulator DGCA “to open up the bookings of SpiceJet up to March 31, 2015”. The DGCA had earlier banned SpiceJet from accepting advance bookings beyond one month in advance. Public sector oil companies will also be requested to give credit for upto 15 days.

The government is making the request after several flight cancellations of the airline on Tuesday. Most flights of the airline from Delhi were reportedly cancelled on Tuesday after financial issues between the airline and the oil companies and only a handful of the airline’s flights reportedly took off from the capital. In other measures, airport operators would be requested to allow 15 days time for making the payments. The government will also request its ministry of finance to permit ECB for working capital as a special dispensation.

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