SpiceJet: loans will be given only if promoters step forward, say banks

The troubled low-cost airline SpiceJet will find the going tough as risk-averse banks are unlikely to provide loans.
Though the Government has urged banks to rescue the Chennai-based airline with ₹600 crore working capital loans, banks have so far not shown willingness to provide any loans.
State Bank of India, which currently doesn’t have any exposure to SpiceJet, flatly refused to give loans. “We are not there (as a lender) and will not be a part of it,” said Arundhati Bhattacharya, Chairman and Managing Director, SBI.
SBI has no outstanding loan with the airline.
An official of a private bank with exposure to SpiceJet said, “No fresh proposal has come our way… We cannot have a struggling airline as a business opportunity as it would be a risk.”
The official added that the bank has sufficient collateral including shares and some current assets, which is multiple times the loan and hence is not worried.
Existing lenders to SpiceJet include Allahabad Bank, City Union Bank and Yes Bank.
These banks are demanding more guarantees in the form of equity and security before taking any further risks to bail out the airline.
Source: http://www.thehindubusinessline.com/industry-and-economy/banking/spicejet-loans-will-be-given-only-if-promoters-step-forward-say-banks/article6705057.ece?ref=relatedNews

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