Jet Airways plans to more than double loan repayments to help attract investors after a default grounded rival Kingfisher Airlines.
India’s biggest listed carrier will pay $600 million (Rs 3,293 crore) of debt in the year ending March 31 and seek rupee loans with interest rates as low as 10 per cent, Chief Financial Officer Ravishankar Gopalakrishnan said in a November 5 conference call. The company, which pays as much as 14 per cent on some debt, is looking for ways to reduce borrowing costs as the nation’s central bank keeps its benchmark repurchase rate at eight per cent, the highest among major Asian economies, to curb inflation.
Jet Airways must divest at least a five per cent stake by June to meet a rule capping founders’ holdings in companies at 75 per cent. Prime MinisterManmohan Singh in September allowed as much as 49 per cent foreign investment in aviation.
The carrier is selling and leasing back planes to free up cash even as Capa predicts rising fuel and airport costs will increase the record combined debt of local carriers including state-run Air India Ltd. by 18 per cent to $20 billion in a year.
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