SpiceJet rises on report of likely $122 million government loan

Shares of SpiceJet Ltd surged 9 per cent on Thursday following reports the Indian budget carrier is likely to receive an additional loan of 10 billion rupees ($122.7 million) under the government's modified Emergency Credit Line Guarantee Scheme.

The government on Wednesday enhanced 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.

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The funds will help the airline clear its dues, pay lessors on time and induct new Boeing 737 Max planes, Business Standard newspaper reported, citing sources.

The airline is currently operating less than 50 per cent of its approved flights, following an order from the Directorate General of Civil Aviation due to multiple incidents involving its aircraft.

Spicejet did not immediately respond to a Reuters request for comment.

Bankers have also been contacted to raise $200 million, Mint reported, citing an airline official.

The report comes two weeks after the air safety watchdog extended a restriction on SpiceJet's flight departures until October 29.

As of 0514 GMT, shares of the carrier were up 6.1 per cent at 40.8 rupees. The stock marked its sharpest intraday percentage gain since August 5.

($1 = 81.5150 Indian rupees)