Aviation shares up as RBI extends ECB borrowing window

Aviation shares up as RBI extends ECB borrowing window

Aviation sector stocks edged higher by 2-5 per cent in morning trade today on the BSE after the Reserve Bank extended ECB borrowing window for airlines till March 2015.

The Reserve Bank had yesterday extended the deadline for aviation sector to raise funds through external commercial borrowings (ECBs) route till March 2015, a move that would provide relief to the cash-crunched sector.

Reacting to the development, shares of SpiceJet and Jet Airways gained on the bourses.
The SpiceJet scrip gained 5.48 per cent to Rs 14.05, while Jet Airways rose 2.65 per cent to touch an intra-day high of Rs 227.90 on the BSE.

As per the earlier guidelines, the scheme was valid till December 31, 2013.

Market analysts said the jump in the counters was largely a knee jerk reaction to the RBI's move of extending the ECB borrowing window.

The overall ECB ceiling for the entire civil aviation sector would be USD 1 billion and the maximum permissible ECB that can be availed by an individual airline company will be USD 300 million, RBI had said.

This limit can be utilised for working capital as well as refinancing of the outstanding working capital Rupee loan availed of from the domestic banking system, it added.

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