Mumbai: Jet Airways, the country’s largest air carrier, expects its debt burden to decline to Rs 8,250 crore by the end of this financial year, a fall of nearly 50 per cent from the corresponding figure at the end of 2011-12 (see chart).
The process has got an impetus from the proposed equity infusion by Etihad Airways of Abu Dhabi. “The infusion from Etihad will help Jet to repay most of its working capital loan. The company will then be left with only debt related to aircraft acquisition that it can service comfortably,” says Jasdeep Walia, aviation analyst at Kotak Institutional Equity.
He estimates Jet’s working capital loans to be around Rs 5,000 crore of its total debt of Rs 13,200 crore at the end of FY12. (Click for charts)
Etihad is to invest around Rs 2,100 crore for a 24 per cent equity stake in the company. It is to also take 50.1 per cent in Jet Privilege, the customer loyalty programme, for around Rs 850 crore. In addition, Jet entered into a sale and lease-back agreement with Etihad for its three pairs of slots at London’s Heathrow airport for five years. This deal is valued at around $70 million (Rs 385 crore) . If Jet is able to repay that loan at the end of the period, the slot ownership will revert to it.
18/06/13 Krishna Kant/Business Standard
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The process has got an impetus from the proposed equity infusion by Etihad Airways of Abu Dhabi. “The infusion from Etihad will help Jet to repay most of its working capital loan. The company will then be left with only debt related to aircraft acquisition that it can service comfortably,” says Jasdeep Walia, aviation analyst at Kotak Institutional Equity.
He estimates Jet’s working capital loans to be around Rs 5,000 crore of its total debt of Rs 13,200 crore at the end of FY12. (Click for charts)
Etihad is to invest around Rs 2,100 crore for a 24 per cent equity stake in the company. It is to also take 50.1 per cent in Jet Privilege, the customer loyalty programme, for around Rs 850 crore. In addition, Jet entered into a sale and lease-back agreement with Etihad for its three pairs of slots at London’s Heathrow airport for five years. This deal is valued at around $70 million (Rs 385 crore) . If Jet is able to repay that loan at the end of the period, the slot ownership will revert to it.
18/06/13 Krishna Kant/Business Standard
