No emergency lending for Jet Airways

MUMBAI: Jet Airways India Ltd’s lenders are reluctant to extend additional loans to the cashstrapped airline ahead of a key report by the company’s financial auditor, according to people with direct knowledge of the matter.

India’s biggest fullservice carrier, partowned by Etihad Airways PJSC, had approached banks for emergency funding but the lenders preferred that the firm raised money from a share sale before they committed to any fresh credit, said one of them.

Lenders are waiting for auditors’ endorsement of financial accounts after the airline delayed its earnings announcement last week, said the people.

In a separate statement on Monday, the airline said it’s been evaluating funding options to meet liquidity requirements “on priority” and working on multiple revenue enhancement and cost-cutting measures.

Jet Airways is seeking to bolster its finances after reporting a loss in the year ended March 31. Rising jet fuel prices have eroded cash and inflated its total debt to 55.4 times earnings before interest and tax as of March. The carrier said last Thursday that the audit committee didn’t recommend financial results for the board’s approval, “pending closure of certain matters”.

State Bank of India, HSBC Holdings Plc and Axis Bank Ltd are among lenders to the carrier, which owes a total 94.3 billion rupees (RM5.51 billion). It had cash and equivalents of 3.2 billion rupees at the end of March.

Shares of Jet Airways have tumbled about two-thirds this year and are trading at their lowest level since June 2015.

The firm has 31.2 billion rupees worth of loan repayments due in the year through March next year, said ICRA Ltd in May. The local unit of Moody’s Investors Service also lowered the rating a notch to “BB+” with a negative outlook, a level that signals moderate risk of default regarding timely servicing of obligations.