New Delhi: The Centre has rejected a proposal by Naresh Goyal-led Jet Airways to borrow almost $700 million from the Bank of Oman for “general corporate purposes”. It has also turned down the airline’s plan to borrow from an associate or overseas subsidiary, a top finance ministry official confirmed to Financial Chronicle.
Goyal had also pleaded for relaxing end-use norms of foreign debt funds accessed for working capital purposes. This too has been rejected. Jet proposed to use funds raised through external commercial borrowings (ECB) to meet fuel expenses, catering and airport charges categorising them as general corporate purposes.
Jet had sought eligibility to borrow funds from overseas subsidiaries (read holding company and its associates), but there were no takers in the government for such a proposal, as this would involve “round-tripping issues”. Jet Airways does not have an overseas subsidiary, but operates a holding company Tail Winds owned by founder-promoter Goyal, which is registered in the tax haven of Isle of Man.
22/04/12 KA Badarinath/Saahil Anant/mydigitalfc.com
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