Indian banks have categorised SpiceJet loans as “high risk”

Three Indian banks have internally categorised loans to SpiceJet Ltd as being at “high risk” though the airline has not defaulted, people with knowledge of the matter said, drawing a denial from the airline.

IDFC First Bank, Yes Bank and Indian Bank are concerned about SpiceJet’s cash flows and have held talks with the carrier seeking assurances as it has been behind on payments to some aircraft lessors, said the sources who declined to be named given the sensitivity of the matter.

However SpiceJet called the Reuters report false and baseless.

“None of our banks has put our account on high risk or alert,” SpiceJet said in a statement. “The same has been confirmed to us by our lenders.”

IDFC said it had not categorised SpiceJet as a “red-flagged” account as it is a performing account.

An IDFC spokesperson said the bank’s net exposure to SpiceJet was small at 460 million rupees ($5.8 million), 200 million rupees of which was covered under a government-sponsored programme and further supported by a “comfortable 2X security cover”.

The other two banks did not respond to Reuters’ requests seeking comment on their SpiceJet loans. Reuters.com