Cash-Strapped Jet Airways Delays Interest Payment on Bond
Delaying payment due March 19 owing to temporary liquidity constraints: Jet Airways in an exchange filing.
(Bloomberg) -- Jet Airways India Ltd. said it will miss a bond interest payment and grounded more planes as lenders work on a plan to restructure the cashed-strapped carrier’s debt.
It’s delaying a payment due March 19 “owing to temporary liquidity constraints,” the company said in an exchange filing. The airline has been forced to ground planes as negotiations between lenders and major shareholder Etihad Airways PJSC over the terms of a bailout plan continue. It barred four more planes from flying Monday, bringing the total to at least 41.
“Due to operational reasons, Jet Airways has cancelled a number of flights to and from Abu Dhabi,” an Etihad spokesperson said. “All affected Etihad guests have been rebooked onto alternative Etihad operated flights or offered refunds as per standard policy.”
Jet Airways, which needs 85 billion rupees ($1.2 billion) to help it get back on its feet, is seeking a revival with banks becoming the biggest shareholders of the company, it said last month. Lenders led by State Bank of India want Jet Airways to stay afloat, and expect to decide on a debt-resolution plan in a week, Rajnish Kumar, the chairman of the nation’s biggest lender, told reporters on March 15.
The beleaguered airline could potentially see some of its leased Boeing Co. 737-800 aircraft reallocated to other carriers, as lessors seek to meet demand for planes after the grounding of Boeing’s newest Max series in several countries.
To contact the reporters on this story: Ronojoy Mazumdar in Mumbai at rmazumdar7@bloomberg.net;Layan Odeh in Dubai at lodeh3@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Ken McCallum, Finbarr Flynn
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