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Jet Airways share price falls over 6% after seven more aircraft grounded on non-payment of dues

BusinessToday.In     February 28, 2019

The Jet Airways share price fell in early trade today after the airline said seven more aircraft have been grounded due to non-payment of lease rentals. Jet Airways share price opened with a loss of 2.38% at 219.50. Later, Jet Airways share price fell 6.16% intra day to 211 level compared to the previous close of 224.85 on the BSE.

Jet Airways share price has lost 70.43% during the last one year and fallen 21% since the beginning of this year. The Jet Airways share price was trading below its 50-day and 200-day moving average of 246.23 and 252.85 levels, respectively. In February, as many as 13 planes of Jet have been grounded on account of non-payment of rentals to lessors.

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In a filing to the stock exchanges, the full-service airline said, "An additional seven aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements".

The carrier is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken to improve its liquidity, the filing said.

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Faced with acute financial woes, the airline is looking to restructure its debt as well as raise funds. On February 23, the airline said an additional two planes have been grounded. This followed an announcement made to stock exchanges on February 7 that it has grounded four of its aircraft on account of non-payment of lease rentals.

Jet Airways also said it continues to provide required and periodic updates to the Directorate General of Civil Aviation (DGCA).

A consortium of banks, led by SBI, has extended loans to Jet Airways, which is looking to rejig debt and raise funds. Lenders can initiate proceedings under the Insolvency and Bankruptcy Code (IBC) to recover dues from debt-laden entities. The process can commence only after approval from NCLT.

Shareholders of Jet Airways had approved conversion of loan into shares and other proposals during the extraordinary general meeting (EGM) last week.

As on September 30, 2018, Jet Airways had gross debt of Rs 8,411 crore (including terms loans from banks and dues to lessors for aircraft lease), as against Rs 8,403 crore as on March 31, 2018. The company has large repayments of Rs 1,700 crore due over December 2018 to March 2019, Rs 2,444.5 crore in FY2020 and Rs 2,167.9 crore in FY2021.

Jet defaulted in servicing its loan obligations on December 31 2018 and the 90-day window before its loans are dubbed non-performing assets (NPA) ends on 31 March 2019. The company is reeling under losses for the last four consecutive quarters with its shares losing over 60% in one year.

Edited by Aseem Thapliyal

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