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MUMBAI: The executive committee of
IDBI on Saturday sanctioned a Rs 500 crore (about $120m) loan to Jet Airways to
fund the pre-payment of its aircraft acquisition. This is in addition to the
$150m already sanctioned by SBI to the Mumbai based airline a week ago. The IDBI
loan is for a two-year tenure at an interest rate of around 10%, sources said.
Jet Airways is in the middle of a $2.5bn aircraft acquisition programme, wherein
about 85% will be raised through debt.
The airline had planned to
float a $850m GDR issue earlier this year which was put off in view of the huge
fall in the company’s stock price on the Indian bourses. The
company’s share price has been taking a steady beating on for the past six
months. Increased competition, spiralling fuel prices and a legal battle with
the Sahara group have impacted the company’s performance. The situation
was worsened by Jet’s Rs 45 crore loss in the first
quarter.
However, in a contrarian trend in the past one week, the
scrip has been looking up on the BSE on weaker oil prices and rumours of an out
of court settlement with the Sahara group. The Jet Airways stock closed up 2.2%
at Rs 575 on Friday
Banking sources say, the IDBI executive committee
had cleared loans to Jet some months ago at a lower rate, however the company
did not avail the loan on the hope that interest rates would soften.
It has now taken up the loan at a higher rate, as interest rates
have hardened in the interim. In the past, about ICICI Bank had sanctioned Rs
2,000 crore to the airline to fund its expansion plans. Jet Airways, currently
India’s largest airline by marketshare, currently has a fleet of 53 planes
will induct about 31 more medium and long haul aircraft in the next three years,
to take the tally up to 84. |
