Jet Airways eyes dollar loans to cut borrowing costs

Mumbai: Faced with higher borrowing costs in the country due to the Reserve Bank of India's aggressive rate hike cycle, Jet Airways Ltd plans to raise $210 million in fresh debt by the end of this fiscal to cut borrowing costs. The company's Senior Vice-President for Finance, Mr M Shivkumar said the move will help offset higher borrowing costs for rupee loans.
The airline is also trying to convert part of its Rs 3,000 crore worth of loans into dollar loans but is facing challenges on that front. “It is becoming increasingly difficult to swap rupee debt into dollar loans now. But we are still hopeful,” said Mr Shivkumar.
With the rupee at a two-year low, many companies are considering hedging their dollar loans. However, Mr Shivkumar said that it would be too early to tie up the higher dollar rate on existing debt as the rupee weakness is expected to be brief.
“Our large fleet of aircraft is an asset that can act as a natural hedge for our dollar debt. Sale and leaseback is always an option on some planes if repayment of loans is necessary,” he said.
19/09/11 Business Line

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Categories: Jet Airways Sep 2011