Temporary relief for SpiceJet: Cash-strapped airline gets more time to raise funds

New Delhi, Dec 15: Suffering a total liability of about Rs 2,000 crore, beleaguered no-frill carrier SpiceJet on Monday approached the government and sought urgent financial help to run its daily operations.

As per a TOI report, "The Centre has given a final chance to cash-strapped SpiceJet to survive, asking the low cost carrier to raise funds within the next 10 days, possibly from promoter Sun Group chief Kalanithi Maran, or face closure."

Temporary relief for SpiceJet: Cash-strapped airline gets more time to raise funds.
Later, reports said that with an imminent closure staring at its face, SpiceJet got a breather with indications that state-run Airports Authority of India would not press for immediate clearing of Rs 200 crore dues after the airline's promoter Kalanithi Maran gave personal guarantees to infuse more funds.

The development took place after the no-frill airline's Chief Operating Officer Sanjiv Kapoor met Civil Aviation Minister Ashok Gajapathi Raju late evening, with official sources saying that the government has asked it to continue operations over the next fortnight.

The sources indicated that the AAI, which had given time to SpiceJet till Tuesday to clear its dues, would not press the deadline and give the airline more time to pay up.

They said the airline's promoter Maran has given "personal guarantees" to infuse more funds into the cash-strapped carrier.

During the day, the airline, which has a liability burden of over Rs 2,000 crore, sought urgent financial help from the government to run its daily operations but received no categorical assurances from it.

Kapoor and S L Narayanan, Chief Financial Officer of its parent company Sun Group, met Minister of State for Civil Aviation Mahesh Sharma and pleaded for "urgent relief".

"No assurance has been given to them," Sharma told reporters after the meeting but said any such decision could be taken at the "highest level" in the government.

He said the airline's request would be put up before the Prime Minister's Office and the ministries of Finance and Petroleum.

The meeting came hours after the airline officials met DGCA chief Prabhat Kumar and shared an operational plan, but official sources said there was "nothing new" in it.

DGCA had also given the airline time till today to release pending salaries of employees and submit a schedule on how it plans to pay vendor dues of about Rs 1,600 crore.

In a tweet later, Kapoor said, "No financial plan submitted to DGCA today. Objective of meeting was to discuss financial impact of 30-day booking limit on the airline."

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.

The airline's total liability stands at over Rs 2,000 crore and it needs at least Rs 1,400 crore immediately to keep it off the ground.

(With inputs from agencies)

OneIndia News

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