Jet’s gross debt likely to add up to ₹11,261 cr

Our Bureau Mumbai | Updated on April 21, 2019

Domestic lenders worst hit; board to meet on April 23 to discuss future plans

Jet Airways’ gross loan and unpaid interest towards its domestic and international lenders may amount to ₹11,261 crore, documents reviewed by BusinessLine suggest.

This includes ₹7,251 crore from nine domestic lenders, another ₹4,000 crore of foreign borrowing and unpaid interest amount of ₹1,000 crore.

The Jet board is scheduled to meet on Tuesday to discuss the way forward for the airline.

The grounded airline had borrowed from public sector banks including State Bank of India (SBI) and Punjab National Bank (PNB) along with private banks such as YES Bank and IDBI Bank.

Of this, SBI has the maximum exposure of 27 per cent, followed by PNB at 24 per cent, YES Bank at 12 per cent and IDBI Bank at 10.4 per cent.

About 57 per cent of the debt from domestic lenders is for working capital and the balance is in the form of term loans.

The beleaguered airline owes another ₹4,000 crore to foreign lenders, non-convertible debentures holders and by way of interest outstanding.

It had also raised funds through external commercial borrowing.

Dubai-based Mashreq Bank has an exposure of ₹1,400 crore, along with HSBC Bank at ₹910 crore. There are non-convertible debentures worth ₹700 crore and interest of ₹1,000 crore over these borrowings. Jet had defaulted on payment of interests and loans earlier this year and in December 2018, and was thrice downgraded by credit rating agency ICRA during that time.

Haircut possible

Meanwhile, airline industry experts said that though SBI is in the midst of leading the bidding process for a new investor to take over Jet, the lenders are staring at a huge haircut, possibly as much as 80 per cent.

SBI has short-listed four bidders: the state-run National Investment and Infrastructure Fund, Abu Dhabi-based Etihad Airways, and private equity firms Indigo Partners and TPG. Earlier, Etihad, which has a 24 per cent stake in Jet, had valued the stake at ₹150 per share. But with the airline temporarily shutting shop, this valuation could get impacted.

Government intervention

On Saturday, Jet’s CEO Vinay Dube, CFO Amit Agarwal and employee representatives met Finance Minister Arun Jaitley and sought urgent government intervention. Another letter was written to President Ram Nath Kovind as well. Sources said Jaitley had promised to look into the matter.

“We requested him to ask the banks to at least release one month’s salaries so that employees do not quit the company, and remain confident that it is going to stay afloat. The Minister said that he will request the SBI chief to look into the matter,” said a representative of the Jet pilot body.

Published on April 21, 2019

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