SpiceJet set to receive funds through ECGLS, extension of up to 3 months for AGM’22

SPICEJET

SpiceJet has received an extension of up to three months for conducting its annual general meeting for the financial year that ended March 2022. Now, the Annual General Meeting (AGM) for the last financial year will be held on or before December 31, 2022.

The budget carrier announced its results for 2021-22 fiscal along with June quarter results on August 31. In a regulatory filing, the airline said it has obtained an extension of up to three months from the Registrar of Companies (NCT of Delhi & Haryana) for conducting the Annual General Meeting for the financial year ending March 31, 2022.

ALSO READ – SpiceJet under attack by ransomware; morning flights affected

SpiceJet set to receive funds through ECGLS; receives an extension of up to 3 months for AGM’22

This is “due to delay in the publication of financial results for the year ended March 31, 2022, on account of a ransomware attack on IT system(s) which affected the completion of the audit process within the stipulated time,” it added.

The airline saw its net loss widen to INR 458 crore in the 2022 March quarter from INR 235.3 crore in the year-ago period. For the full fiscal year 2021-22, the net loss surged 73% to INR 1,725 crore from INR 998.30 crore in the comparable period. In the three months ended June this year, the carrier’s net loss widened to INR 789 crore.

ALSO READ – Worst nightmare of SpiceJet – From financial losses widening to the CFO resigning to non-payment of salaries

Moreover, amid the widening quarterly loss and a series of recent mid-air incidents with the airline, its Chief Financial Officer (CFO), Sanjeev Taneja, resigned on August 31.

SPICEJET
The airline saw its net loss widen to INR 458 crore in the 2022 March quarter from INR 235.3 crore in the year-ago period.

The airline, in an exchange filing, had also stated that the board had identified the candidate for appointment as CFO. “The vacancy shall be filled in September 2022 and the necessary disclosure regarding such appointment shall be made upon completion of all formalities,” it added.

Shares of SpiceJet on Friday, September 2 closed 0.33% higher at INR 45.10 apiece on BSE.

SpiceJet to get funds from ECLGS

SpiceJet is likely to receive around INR 225 crore next week as a part of the Emergency Credit Line Guarantee Scheme (ECLGS). The funds will be used to clear statutory dues and lessor payments. SpiceJet had applied for INR 280 crore loans under the ECLGS.

Launched by the central government as a special scheme in wake of Covid-19 in 2020, the programme intended to provide guarantee coverage to banks and NBFCs to enable them to extend emergency credit to various industries to meet their working capital requirements.

SPICEJET
SpiceJet is likely to receive around INR 225 crore next week as a part of the Emergency Credit Line Guarantee Scheme (ECLGS).

Under ECLGS, an aviation sector company can get a loan of up to 50% of its total credit outstanding across all lending institutions. However, the amount borrowed by the company can not be more than INR 400 crore.

ALSO READ – Spicejet looking for a “knight in shining armour” to help with financial distress

SpiceJet is looking to raise INR 2,000 crore through various means, including a stake sale, its largest shareholder and chairman, Ajay Singh, said. “We are exploring and ready to look at all options… on the table. We will ensure SpiceJet remains financially vibrant,” said Singh.

ALSO READ – Cash-strapped SpiceJet plans to take delivery of 7 Boeing 737 Max

The no-frills airline is expecting Boeing to resume delivery of the 737 Max aircraft in October. SpiceJet plans to take delivery of seven planes, which will also bring in income through their sale and leaseback.

SPICEJET
SpiceJet is looking to raise INR 2,000 crore through various means, including a stake sale

Singh holds around 60% of the airline, of which 44.24% is pledged with lenders. Based on its Tuesday, August 30 closing share price of INR 46.25 on the BSE, SpiceJet’s market cap was INR 2,783 crore.

Separately, SpiceJet employees on Wednesday, August 31 alleged a delay in the disbursal of salaries for the second straight month, with the budget airline saying the payments were being made in a “graded format”.

ALSO READ – DGCA orders SpiceJet to operate only 50% of approved flights

In recent months, SpiceJet has been facing turbulent times, including financial headwinds. In July, the regulator directed the airline to operate only 50% of flights in the wake of many of its planes facing technical issues.

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