Home / News / India /  IDFC, Indian Bank, Yes Bank put SpiceJet loans on high-risk: Report
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Private lenders IDFC First Bank and 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% 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% of the airline, as of June 30 had pledged shares representing a 26% stake, mostly to these three lenders for credit facilities for company use, according to a regulatory filing.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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