Jet Air­ways seeks $350m soft loan from Eti­had

Financial Chronicle - - FRONT PAGE - FC BU­REAU

CASH-STRAPPED Jet Air­ways has sought a soft fi­nanc­ing of $350 mil­lion from its in­vest­ment part­ner Eti­had Air­ways, as it con­tin­ues to hold dis­cus­sions with the lat­ter to off­load ad­di­tional stake in the car­rier, re­vealed an air­line source on Thurs­day.

The Abu Dhabi-based Eti­had had come to the res­cue of the Naresh Goyal-con­trolled Jet Air­ways dur­ing the ear­lier down­turn too. In 2013, it had ac­quired 24 per cent stake in Jet Air­ways for Rs 2,060 crore, be­sides ex­tend­ing low-in­ter­est loan of $150 mil­lion as well as pur­chas­ing 50.1 per cent stake in its loy­alty pro­gramme Jet Priv­i­lege.

“Jet Air­ways has sought $350 mil­lion soft loan from Eti­had even as its dis­cus­sions with the Gulf car­rier con­tinue for selling ad­di­tional stake,” the source said. Eti­had has, how­ever, of­fered to fi­nance as much as $200 mil­lion, the source said. “A fi­nal de­ci­sion on the pro­posal is yet to be taken,” it added.

Both Jet Air­ways and Eti­had re­fused to com­ment on the deal. “Eti­had does not com­ment on ru­mour or spec­u­la­tion,” an Eti­had Air­ways spokesper­son said in an email re­sponse to a news agency. A Jet Air­ways spokesper­son too said the car­rier does not com­ment on “spec­u­la­tion” in line with its pol­icy.

With three back-to-back quar­terly losses and a net debt of Rs 8,052 crore as on Septem­ber 30, the air­line is work­ing on ways to raise funds and re­duce costs.

Mean­while, NRI busi­ness­man and founder of Lulu Group MA Yusuff Ali may again play a key role in the on­go­ing talks be­tween Eti­had and Jet Air­ways, sources said. In 2013 too, Ali played a cru­cial role in bring­ing the deal to a close be­tween the two air­lines. The $7.4 bil­lion Lulu Group op­er­ates hy­per­mar­kets and malls in In­dia and over­seas.

Sources said Ali could come in as Eti­had’s In­dian part­ner, the need for which will arise if the air­line de­cides to in­vest in Jet Air­ways, trig­ger­ing an open of­fer. As per the gov­ern­ment’s FDI rules, a for­eign in­vestor can own a max­i­mum of 49 per cent in an In­dian air­line.

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