Jet Airways was obviously not fibbing when it reiterated time and again this year that the equity deal with Etihad Airways is critical to its very survival. The deal is expected to fructify shortly and will see Etihad pump in over $600 million into cash-starved Jet Airways. But will this be enough? Auditors to Jet have made it clear (after Jet posted highest ever losses for the September quarter yesterday) that its continuation as a “going concern” is dependent on funds it receives from Etihad. Even these funds may not be enough to steer Jet out of financial trouble. The first thing that Etihad’s money will do is provide some relief to Jet on paring its debt and reducing servicing costs. It is also expected to help the airline better negotiate suppliers’ contracts. But will it provide adequate working capital cushion and help Jet stem the bleeding? Jet funds subsidiary JetLite’s operations and has itself acknowledged that JetLite’s networth has become negative, which puts in doubt JetLite’s ability to return the loans provided by Jet Airways. Another reason for Jet to worry.
24/10/13 Sindhu Bhattacharya/First Post
To Read the News in full at Source, Click the Headline
24/10/13 Sindhu Bhattacharya/First Post
