Wednesday, March 06, 2019

Jet Airways pledges assets to borrow Rs 225 crore from SBI: Report

Debt-ridden Jet Airways has taken a new route to raise funds for its operations. The cash-strapped airline has reportedly pledged its fixed deposits (FDs) worth Rs 1,500 crore with State Bank of India (SBI) to borrow Rs 225 crore, according to a media report.

Currently, cash-strapped Jet Airways has a debt of around Rs 8,200 crore and has been scrambling to raise funds for operations.

The lenders to the beleaguered airline, led by State Bank of India (SBI), were not ready to sanction a term loan to the company without gaining exclusive rights on its cash deposits or appreciating assets, according to a Mint report.

As per the report, Jet Airways can borrow additional funds from SBI with the same FDs as security.

There were also speculations that its strategic partner Etihad, which currently owns a 24 per cent stake in the domestic carrier, would invest around Rs 1,400 crore to acquire more stake in the company.
It is to be noted that shareholders of the airline had approved proposal for conversion of its debt into shares at the recent extraordinary general meeting (EGM), during which Deputy Chief Executive Officer Amit Agarwal announced that Jet has been talking to various investors for capital infusion. The Bank Led Resolution Plan (BLRP) by lenders estimated a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale and lease back of aircraft, among other things.
05/03/19 Business Today

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