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Jet Airways defaults on $109 million loan repayment to HSBC Bank: report

"The repayment of the External Commercial Borrowing, availed by the Company for working capital purposes, falling due on 28 March 2019, has been delayed owing to temporary liquidity constraints and the Company has engaged with the Lender in relation to the same," Jet Airways quoted in an exchange filing without divulging any further details on the matter.

twitter-logo BusinessToday.In        Last Updated: March 30, 2019  | 17:09 IST
Jet Airways defaults on $109 million loan repayment to HSBC Bank: report
Rajnish Kumar, chairman of State Bank of India, which is leading the lenders' plan, has said he expects to get a new investor in Jet by May 31.

Jet Airways India Ltd. has reportedly missed loan repayment to HSBC Bank that was due on March 28, and was part of a two-tranche facility totaling $140 million. The company took external commercial borrowing from HSBC in 2014, said a Bloomberg report .

"The repayment of the External Commercial Borrowing, availed by the Company for working capital purposes, falling due on 28 March 2019, has been delayed owing to temporary liquidity constraints and the Company has engaged with the Lender in relation to the same," Jet Airways quoted in an exchange filing without divulging any further details on the matter.

Jet had also missed payment on another external commercial borrowing tranche amounting to $31 million that was due on March 11, and hasn't repaid any of the loan. This has added to the string of missed deadlines by the embattled Indian carrier. After it failed to honour obligations to India lenders, the airline's credit rating was also cut to default in January.

Lenders who now hold more than 50% of Jet are seeking to overhaul the company and salvage. In March, lenders committed to infuse as much as Rs 1,500 crore ($217 million) in emergency debt funding, conditional on the resignation of Jet chairman Naresh Goyal.

Rajnish Kumar, chairman of State Bank of India, which is leading the lenders' plan, has said he expects to get a new investor in Jet by May 31.

Jet Airways needs an estimated Rs 8,500 crore to get back on its feet. Its collapse could put about 23,000 jobs at risk and dent Prime Minister Narendra Modi's image ahead of his re-election bid.

In a separate development, over 1,000 pilots of the struggling private carrier have decided to go ahead with their "no flying" call from April 1, following the airline failing to receive funds from the banks Friday.

The National Aviators Guild (NAG), Jet Airways' pilots guild, had last week announced its decision not to fly from April 1 if their pending salaries were not cleared and clarity on the revival plan not provided by March 31.

"As announced earlier this week , the airline's lenders and its management team would like to reiterate, that every effort is being made to inject adequate liquidity into the Company, to quickly restore normalcy of operations, ensuring due compliance with all appropriate legal processes / formalities at the same time. While acknowledging the support of each and every member of its family, Jet Airways' especially recognises the contribution of its pilots, AMEs and members of its senior management, who have sacrificed personal interests and have gone beyond their call of duty in order to ensure safe and reliable operations for the airline's guests," a Jet Airways spokeperson said.

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