The Jet Airways share price rose in early trade today amid reports that Etihad Airlines and a new partner will jointly invest nearly Rs 3,800 crore to revive the ailing private carrier. Jet Airways share price rose up to 2.68% to 254.70 compared to the previous close of 248.05 on the BSE. Jet Airways share price opened with a gain of 2.16% at 253.40 on BSE today. Jet Airways share price has been gaining for the last seven days and risen 13.17% during the period.
Cash-strapped Jet Airways defaults on foreign loan repayment
Jet Airways share has lost 63.37% during the last one year and fallen 9.06% since the beginning of this year. Jet Airways share clocked a turnover of Rs 6.28 crore with 2.49 lakh shares changing hands on BSE.
An Economic Times report said Etihad Airlines and National Investment and Infrastructure Fund (NIIF) will invest Rs 1,900 crore each into Jet Airways. Founder-promoter Naresh Goyal and his wife will step down from the board and all executive positions, the report said adding that Goyal's stake will be capped at around 22% while NIIF will own around 20% in the airline. Jet Airways is severely hit by cash crunch to run daily operations.
Till date, 28 Jet aircraft have been grounded due to non-payment of lease rentals. On February 14, Jet Airways' board had approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline. Its shareholders also approved conversion of loan into shares and other proposals during the extraordinary general meeting on February 21.
The BLRP by lenders estimated a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale and lease back of aircraft, among other things. Shareholders of Jet Airways had approved conversion of loan into shares and other proposals during the extraordinary general meeting (EGM) on February 21.
As on September 30, 2018, Jet Airways had gross debt of Rs 8,411 crore (including terms loans from banks and dues to lessors for aircraft lease), as against Rs 8,403 crore as on March 31, 2018. The company has large repayments of Rs 1,700 crore due over December 2018 to March 2019, Rs 2,444.5 crore in FY2020 and Rs 2,167.9 crore in FY2021.
Jet defaulted in servicing its loan obligations on December 31 2018 and the 90-day window before its loans are dubbed non-performing assets (NPA) ends on 31 March 2019. The company is reeling under losses for the last four consecutive quarters with its shares losing over 60% in one year.
Edited by Aseem Thapliyal