Jet Airways to raise $150 million through ECBs in a month1 min read . Updated: 12 Aug 2014, 12:18 PM IST
The airline will use the proceeds from ECBs to retire a part of its high-cost debt
Mumbai:Jet Airways (India) Ltd, the country’s second largest airline by passengers, on Tuesday said it is raising $150 million (around ₹ 917 crore) by borrowing from overseas to retire high-cost debt.
The airline is pursuing with a clutch of banks to raise $150 million via external commercial borrowings (ECBs) and is likely to close the deal in the next 30 days, Ravichandran Narayan, vice-president, finance, Jet Airways, said on a conference call with analysts.
“We are examining all possible options for raising funds," Narayan said.
Jet Airways has a total debt of around ₹ 9,800 crore on 30 June and the airline will use the proceeds from ECBs to retire a part of this.
Narayan said Jet Airways had already raised $150 million in the fourth quarter of the previous fiscal year from overseas banks with Etihad Airways PJSC as guarantor.
Eithad Airways had bought a 24% stake in Jet Airways last year.
The airline is taking stringent measures to operate in an industry which continues to face tough challenges, and has formulated a three-year turnaround strategy to get back to profitability, Naresh Goyal, chairman of Jet Airways, said on Monday.
“Our first priority in this three-year turnaround strategy, which includes both financial and operational restructuring, has been to establish a more solid financial foundation for this airline, and in this regard, the company has already taken a series of measures to retire high-cost debt and reduce borrowing costs," Goyal said.
Meanwhile, Jet Airways’ fiscal first-quarter loss narrowed as the airline claimed that its partnership with United Arab Emirates’ Etihad Airways had started yielding benefits, including lower costs, as the two partners shared resources and facilities.
Jet said its net loss in the three months ended 30 June was ₹ 217.6 crore against ₹ 355.4 crore in the year earlier. Still, it was the airline’s sixth straight quarterly loss as it battled high costs and was forced to sell tickets at a discount to counter intense competition. Sales rose 17% to ₹ 4,685.6 crore from ₹ 4,005 crore in the year-ago period.