India: IDFC, Indian Bank, Yes Bank put SpiceJet loans in high-risk category, sources say

Private lenders IDFC First Bank, 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 per cent 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.

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