India's second-largest airline by passenger numbers Jet Airways (India) Ltd is raising at least $300 million (Rs 1,860 crore) from India and overseas, to bring down its high-cost debt, a senior executive of the company said on Monday.
The carrier is raising $150 million and has also obtained the Reserve Bank of India's approval to raise $150 million via external commercial borrowing, Jet Airways' CFO and acting CEO Ravishankar Gopalakrishnan said in a conference call with investors. Jet recently offloaded 24 per cent stake to Abu Dhabi-based Etihad.
"With the support of Etihad Airways' bankers, we have got sanction for $150 million ECB and documentation of the same is in the process. Separately, we have got sanction from a bank from Middle East for another $150 million," Gopalakrishnan said. This borrowing will help the carrier replace its high-cost Indian rupee debt worth $300 million, saving $30 million on interest costs.
Indian companies prefer raising large funds from overseas as interest rates there are low, while domestic interest rates remain high.
Furthermore, he said the low-cost carrier managed to bring down its debt to Rs 10,895.2 crore as on December 31, 2013 from Rs 12,494.7 crore as on September 30, 2013.
Meanwhile, Naresh Goyal-promoted Jet Airways registered a net loss of Rs 267.89 crore for three months ended December 31, 2013, which is its fourth straight quarterly loss, owing to lower travel demand and muted rise in passenger yields. The loss was higher when compared with the December quarter of 2012, but lower on a sequential basis.
(Edited by Joby Puthuparampil Johnson)