Etihad flies in to rescue Jet, will help raise loans
Etihad offers to guarantee loans worth $150 mn to keep Jet operational
In an apparent rescue act, Etihad Airways of Abu Dhabi has offered to guarantee loans worth $150 million that Jet Airways (India) Ltd needs to keep the airline operational, two people directly aware of discussions between the two airlines said.
The development follows several rounds of talks between the two sides which also included a potential equity infusion by Etihad and adding a third Indian partner, said the two people cited above. Both requested anonymity as the talks are private.
“As an immediate measure, Etihad has agreed to stand as a guarantor for any fresh loans to be raised by Jet Airways and has engaged at least two foreign banks, one of them headquartered in UK, to syndicate the new loans,” said the first person. “Both sides feel that an equity infusion by Etihad which already owns 24% in Jet Airways will take time and it may not be enough for Jet Airways to tide over its current financial troubles, given Jet’s depressed valuations,” the person said. “In the given situation, both sides which have been having discussions for a while now, feel that this is the
Etihad offers guarantees for
The airline wants Indian banks to
Indian banks yet to give
Jet and Etihad best possible solution for now. According to industry estimates, Jet Airways will need close to $500 million between now and April next year to meet repayment obligations and manage operating expenses.”
A spokesperson for Etihad Airways said it does not comment on rumour or speculation. An email sent to Jet Airways remained unanswered until press time on Thursday.
Jet Airways is already behind schedule on payment of its aircraft lease rentals and has not paid staff salaries in full for the past few months. Since January, shares
of Jet Airways
Etihad in talks to rope in third partner to
to Etihad on increasing limits
for an equity infusion