Jet Airways Plans to Give Loans to JetLite

Mumbai: Jet Airways (India) Ltd. said Wednesday it plans to give 500 million ($9.6 million) of interest-free loans to JetLite by the end of March as part of immediate steps to keep the loss-making unit continue its operations.
"These funds will be enough for JetLite," said M. Shivkumar, senior vice president in charge of finance at Jet Airways. "The environment is improving now and we expect higher yields in the coming months to generate the additional requirement of cash," he said, referring to December and January, when extended holidays lead to a rise in travel.
The decision to provide financial support to JetLite follows remarks from Jet's auditors that the carrier needs to raise money to fulfil its obligations and also fund JetLite, whose net worth has eroded.
Auditors Deloitte Haskins & Sells and Chaturvedi & Shah said in their limited review of Jet's July-September results that raising funds was vital if the airline's accounts in the future are to be prepared on a "going concern" basis, which refers to a company's ability to generate enough funds to stay operational.
Jet Airways, India's biggest airline by market share, had infused 16.45 billion rupees as equity and an additional 14.14 billion rupees as loans to JetLite until the end of September.
23/11/11 Anirban Chowdhury/Wall Street Journal

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Categories: Jet Airways Nov 2011, Jetlite Nov 2011