SpiceJet, GoAir and other aviation companies have guaranteed support of Rs349 crore

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NEW DELHI: Airlines, including airlines such as SpiceJet and GoAir, have received guaranteed support to the tune of around Rs349 crore under the government’s Emergency Line of Credit Guarantee (ECLGS) program, Minister of State for Civil Aviation VK Singh told Rajya Sabha. Wednesday.

Responding to a question, Singh said no funds had been allocated separately to the civil aviation sector, but borrowers in the sector had received guaranteed support of up to Rs 349 crore as of July 16, according to information from National Credit Guarantee Trustee Company Limited. (NCGTC).

According to data submitted by Singh, SpiceJet Limited has been guaranteed an amount of Rs127.52 crore, while Bird Worldwide Flight Services Mumbai Private Limited, a unit of Bird Group which operates ground handling services at the airport. from Mumbai, has been guaranteed an amount of Rs8. 0.5 crore under ECLGS 3.0. A total of Rs136 crore has been guaranteed under ECLGS 3.0.

Meanwhile, a net amount of Rs213 crore has been guaranteed to no less than eight companies under ECLGS 2.0. These include CAE Simulation Training Private Limited ( ??18.40 crore), Aerostructures Manufacturing India Private Limited ( ??45.19 crore), Bengal Aerotropolis Project Limited ( ??16.36 crore), Suad Forging India Private Limited ( ??3.5 crore), WAISL Limited ( ??26 crore), Go Airlines (India) Limited ( ??25.65 crore), Flight Simulation Technique Center Private Limited ( ??44.14 crore), Air Works India Engineering Private Limited ( ??11.07 crore), VEM Technologies Private Limited ( ??1.93 crore), Rossell India Limited ( ??18.31 crore) and Alpha Design Technologies Private Limited ( ??2.50 crores).

The finance ministry launched the Emergency Credit Lines Guarantee Program (ECLGS) in May last year to help businesses affected by the pandemic. This program was initially aimed at providing Rs3 lakh crore of unsecured loans to MSMEs and businesses to alleviate the distress caused by coronavirus-induced lockdowns. However, sectors such as aviation and tourism were later included in the program.

The expansion of ECGLS to sectors such as civil aviation, hotels and tour operators, which have been hit hard by the devastating second wave of the covid-19 pandemic, will serve as a lifeline for these companies to high leverage, Crisil Rating said in a report in June.

“More sectors have been included in the scope of the program, some eligibility criteria have been relaxed and micro, small and medium-sized enterprises (MSMEs) have been allowed to benefit from loans for longer tenure periods. “, says the report.

“The regime sanctioned approximately ??2.54 lakh crore ( ??2.5 trillion) of loans under the three previous versions in mid-May, ”he added.

The Union government has decided to extend the validity of the scheme from May 13 to September 30, 2021 or until guarantees for an amount of ??3 trillion are issued. Disbursements under the program will be authorized until December 31, 2021.

“All of these (sectors) have been hit hard by Wave 2. During the current quarter, these sectors are expected to experience a demand contraction of more than 30% sequentially,” Crisil said in the report.

“In addition, with the exception of airport operators, many companies in the other stipulated sectors of the program have high leverage, which limits their ability to withstand an unexpected contraction in demand,” he said. he adds.

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