Jet Airways India Ltd., the beleaguered carrier that’s in the midst of bailout talks with its partner and lenders, is set to get an emergency loan of as much as Rs 600 crore ($85 million) to help it tide over a cash crunch, according to people familiar with the matter.
Banks, led by State Bank of India, plan to provide the funds against shares pledged by founder and Chairman Naresh Goyal and partner Etihad Airways PJSC and backed by their guarantees, the people said, asking not to be identified before a public announcement. The disclosure is likely to be made after Jet Airways’ extraordinary shareholder meeting scheduled for Feb. 21, one of the people said.
The fund infusion would come as a lifeline for Jet Airways, Asia’s worst-performing airline stock, that has defaulted on interest payments, delayed salaries and grounded multiple aircraft in its struggle to stay afloat. Etihad, Goyal and SBI have been holding talks for weeks over a rescue deal for the carrier that hasn’t seen a profit for nine of the past 11 years in the face of cutthroat competition.
“That’s a good amount, I’d take that as a big positive,” said Mayur Milak, a Mumbai-based analyst at IndiaNivesh Securities Ltd. “Crude has also came down from $85 to $60 and operational metrics have become more favorable. Once you get the money, that definitely adds to the sustainability of operations.”
Representatives for SBI and Jet Airways didn’t immediately respond to emails seeking comment. Etihad declined to comment. Jet Airways’ shares, which has dropped 73 percent in the past year, gained 1.4 per cent at 224.25 rupees in Mumbai on Wednesday.
14/02/19 Saloni Shukla and P R Sanjai/Economic Times
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Banks, led by State Bank of India, plan to provide the funds against shares pledged by founder and Chairman Naresh Goyal and partner Etihad Airways PJSC and backed by their guarantees, the people said, asking not to be identified before a public announcement. The disclosure is likely to be made after Jet Airways’ extraordinary shareholder meeting scheduled for Feb. 21, one of the people said.
The fund infusion would come as a lifeline for Jet Airways, Asia’s worst-performing airline stock, that has defaulted on interest payments, delayed salaries and grounded multiple aircraft in its struggle to stay afloat. Etihad, Goyal and SBI have been holding talks for weeks over a rescue deal for the carrier that hasn’t seen a profit for nine of the past 11 years in the face of cutthroat competition.
“That’s a good amount, I’d take that as a big positive,” said Mayur Milak, a Mumbai-based analyst at IndiaNivesh Securities Ltd. “Crude has also came down from $85 to $60 and operational metrics have become more favorable. Once you get the money, that definitely adds to the sustainability of operations.”
Representatives for SBI and Jet Airways didn’t immediately respond to emails seeking comment. Etihad declined to comment. Jet Airways’ shares, which has dropped 73 percent in the past year, gained 1.4 per cent at 224.25 rupees in Mumbai on Wednesday.
14/02/19 Saloni Shukla and P R Sanjai/Economic Times
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