Jet Airways secures Rs1,000 crore loan
12 Nov 2008
Mumbai: India's largest private carrier by number of passengers carried, Jet Airways, is believed to have entered into a financing arrangement with a west Asian investment agency Mubadala Development Company for a funding of Rs1,000 crore. The instrument of funding is yet to be formalised, however.
Mubadala is wholly owned by the government of Emirates of Abu Dhabi.
Terms of the loan were not immediately available.
According to industry observers, the deal will allow Jet to remain afloat for at least another year, even as it continues to battle a worsening operating environment along with other airlines.
Jet announced a loss of Rs384 crore for the second quarter of this fiscal and is struggling to clear outstanding dues with state-owned oil marketers, airport authorities and operators. Its outstanding to oil firms alone is to the tune of Rs1,057 crore.
It has also ordered 10 Boeing 777-300ERs.
The carrier recently entered into an operational alliance with rival Kingfisher Airlines, through which both carriers intend to rationalise ground-handling facilities, fuel arrangements, pilot usage and routes.
The airline has been looking at ways to raise funds for along time now and repeatedly failed to raise cash through a rights issue as market conditions continued to worsen through the year.