SpiceJet shares climb over 5% on 'Rs 1,000 crore' additional government loan

Shares of SpiceJet Ltd surged more than 5 per cent on Thursday as the budget carrier is likely to receive an additional loan of Rs 1,000 crore under the government's modified Emergency Credit Line Guarantee Scheme.

Shares of the airline were trading 5.46 per cent higher to trade at Rs 40.55 in afternoon deals. During intraday deals, the stock jumped as much as 9.23 per cent to hit Rs 42. However, the airline's shares traded more than 53 per cent lower from their 52-week high of Rs 87.25.

SpiceJet is likely to receive an additional loan of Rs 1,000 crore under the government's modified Emergency Credit Line Guarantee Scheme, an airline source told Business Today.

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The funds would help the airline clear its dues.

The Centre raised the maximum loan amount eligibility for airlines under the scheme to 100 per cent of their loan outstanding to help the companies tide over cash-flow problems.

The ECLGS, initially launched in 2020 to provide cheaper loans to small businesses (MSMEs) during the pandemic period, was to expire on March 31, 2022. In the Budget 2022-23, Union finance minister Nirmala Sitharaman extended the scheme till March 2023, along with expanding its corpus and scope.

Also Read | DGCA extends 50% cap on SpiceJet operations till Oct 29 over safety incidents

Meanwhile, SpiceJet is operating less than 50 per cent of its approved flights, following an order from the Directorate General of Civil Aviation (DGCA) due to multiple incidents involving its aircraft. Last month, the aviation regulator extended a restriction on SpiceJet's flight departures until October 29.

Domestic passenger traffic has plateaued at around 90 per cent of pre-Covid levels over the past few months. The passenger traffic is expected to improve during the festive season, said a report by Centrum Institutional Research.