Corporate Aug 8, 2013
Mumbai: Jet Airways, which today posted a loss for the second consecutive quarter, said the $749-million cash flow from the proposed deal with Etihad Airways will help it repair its balance sheet.
The airline also said it plans to raise $300 million in external commercial borrowings (ECB) to retire high-cost debt.
The company reported a net loss of Rs 355.38 crore for the first quarter ended 30 June compared with a profit of Rs 24.7 crore a year earlier. Total income from operations declined to Rs 4,005.15 crore from Rs 4,587.27 crore, Jet Airways said in a filing to the BSE today.
Last month, the Foreign Investment Promotion Board approved a Rs 2,058-crore deal under which Abu Dhabi-based Etihad proposes to buy a 24 percent stake in Naresh Goyal-led Jet Airways. The proposal needs to be cleared by capital markets regulator Sebi and fair trade watchdog CCI.
"We will use the $749-million proceeds from the deal with Etihad Airways, which is awaiting regulatory approvals, to retire $2.04 billion debt of the airline and improve the overall balance sheet," Jet Airways Chairman Naresh Goyal told shareholders at the airline's 21st AGM here.
Jet Airways group chief financial officer Ravishankar Gopalakrishnan said the company is "planning to raise $300 million in ECBs to retire the debt. Out of this, the airline is already in talks with banks to raise $150 million, while the rest will come from Etihad, once the stake sale deal is inked."
"Out of the total debt, around $300 million is high cost, which we want to retire with this ECB facility. That apart we also need to raise another $300 million in working capital this fiscal," the CFO said, without offering a timeline.
As part of the deal, the Abu Dhabi flag carrier has agreed to lend $150 million to Jet at 3 percent interest.
Goyal said three of the five planes leased to Thai Airways have been returned and leased out again to Turkish Airlines. The remaining two will be returned over the next three-five months and will be retained by Jet.
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