(MENAFN- Khaleej Times)
Private lenders IDFC First Bank, Yes Bank and state-owned Indian Bank have put their loans to SpiceJet Ltd in the high-risk category, the latest setback for the airline, people with knowledge of the matter said.
The lenders are concerned about SpiceJet's cash flows and have held discussions seeking assurances from the Indian budget carrier as it is behind on payments to some aircraft lessors, the sources said.
SpiceJet's shares fell as much as 4.8 per cent on the news.
The discussion comes as SpiceJet's approved fleet was halved for eight weeks this summer by regulators due to safety snags and as lessors have filed formal applications to de-register four planes. The two moves have raised concerns the airline's tight liquidity could be further strapped amid high fuel prices and rising competition from new entrants like Akasa Air.
One of the sources said 'there is no positive news about SpiceJet' after earnings had been under pressure for several years due to the pandemic. The airline's outlook does not look encouraging, the source said.
SpiceJet said that no bank has put its account on high alert.
'Loans are being serviced as per the agreed terms. We are not aware of any bank having any 'concern' nor has there been any communication regarding the same to SpiceJet,' a company spokesperson told Reuters in an email.
The banks did not respond to Reuters' requests seeking comment on the current loan size, concerns with SpiceJet's financial position and if it had asked for more funds.
SpiceJet Chairman Ajay Singh and his wife, who control 59 per cent of the airline, as of June 30 had pledged shares representing a 26 per cent stake, mostly to these three lenders for credit facilities for company use, according to a regulatory filing.
ALSO READ:
- India's newest budget carrier Akasa begins commercial operations
- India: SpiceJet flyers walk on airport tarmac after waiting for bus for 45 minutes
MENAFN08082022000049011007ID1104665543
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.