India's SpiceJet rises on report of likely $122 mln govt loan

India's SpiceJet aircraft prepares for landing at the airport in Mumbai July 15, 2008. REUTERS/Punit Paranjpe (INDIA)

BENGALURU, Oct 6 (Reuters) - Shares of SpiceJet Ltd (SPJT.NS) surged 9% 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% of their loan outstanding to help the companies tide over cash-flow problems.

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% of its approved flights, following an order from the Directorate General of Civil Aviation due to multiple incidents involving its aircraft. read more

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 Oct. 29. read more

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

($1 = 81.5150 Indian rupees)

Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Savio D'Souza and Sherry Jacob-Phillips

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