Jet to sell and lease back aircraft to meet expenses

Mumbai: Hit by a credit crunch and a third-quarter loss of Rs214 crore, Jet Airways (India) Ltd plans to sell and lease back at least one of the 11 wide-body A330 aircraft in its fleet in addition to raising a bank loan to meet immediate operational costs, a company executive said on Monday.
The airline expects a “comfortable cash position for this fiscal” after borrowing Rs750 crore, said K.G. Vishwanath, senior general manager for management information systems and investor relations at the airline, India’s largest carrier by passengers flown.
The airline is in talks with domestic lenders for the loan, Vishwanath told an analysts’ conference. The airline would raise the funds from two nationalized banks, The Economic Times reported on Monday, citing chief executive officer Wolfgang Prock-Schauuer.
The amount will be raised as a term loan and used to fund the airline’s working capital requirements, said a senior Jet Airways executive who did not want to be identified. Another person close to the development, who also didn’t want to be named, said the carrier is in talks with State Bank of India.
“We have plans to do a sale-and-leaseback of A330 during this quarter. The details of sale-and-leaseback are yet to be finalized,” Vishwanath said at the conference. Jet Airways had raised $22 million (Rs106.9 crore) by selling one Airbus SAS-made A330 earlier that it leased back.
The airline raised Rs1,250 crore from Punjab National Bank, or PNB, and Indian Overseas Bank last month to meet operational cash requirements. In the case of the PNB loan, Jet Airways pledged its international ticket sales, whereby ticket revenue would go into a special bank account from which the lender would first withdraw its share and the balance would go to the airline.
20/01/09 P.R. Sanjai/Livemint

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Categories: Jet Airways Jan 2009