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Jet Airways To Meet State Bank Of India, Other Lenders Today: 10 Points

Jet Airways had last year defaulted on a scheduled loan repayment, creating ripples in the country's aviation sector.

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Jet Airways To Meet State Bank Of India, Other Lenders Today: 10 Points

Jet Airways had a debt of Rs 8,052 crore as of September 30, 2018

Jet Airways, which is struggling with debts to the tune of over Rs 8,000 crore, will meet a group of lenders including State Bank of India (SBI) at around 2 pm on Tuesday. The meeting of Jet Airways with its lenders comes amid falling crude oil prices, an opportunity that the airline wants to use to assure banks and improve its cash flows. Jet Airways had last year defaulted on a scheduled loan repayment, creating ripples in the country's aviation sector.
Here are 10 things to know:
  1. Jet Airways owes money to pilots, lessors, banks and vendors. It had a debt of Rs 8,052 crore ($1.15 billion) as of September 30, 2018.
  2. The airline said earlier this month that it had defaulted on debt payment to a consortium of banks, led by SBI. The payment of interest and principal instalment was delayed "due to temporary cash flow mismatch", Jet said in a statement. The deadline for payment was December 31.
  3. That prompted credit ratings agency ICRA to lower Jet Airways' long- and short-term ratings, which sent its stock sharply lower.
  4. The problems of Jet Airways have been exacerbated by higher oil prices and intense pricing competition in the domestic market.
  5. SBI is carrying out a forensic audit of Jet Airways for alleged irregularities.
  6. The airline is close to reaching a deal with State Bank of India for a fresh loan of Rs 1,500 crore ($215 million) to meet its working capital needs, news agency Reuters had reported last week citing two sources aware of the matter.
  7. Shares in Jet Airways on Tuesday declined 1.5 per cent amid choppy trade in the markets. At 11:15 am, Jet Airways shares traded 1.12 per cent lower at Rs 243.50 apiece on the BSE, whose benchmark index Sensex was up 0.02 per cent.
  8. Foreign lenders are expected to meet Jet Airways executives next week.
  9. Jet Airways and its second-largest shareholder, Etihad Airways, are in talks with bankers on a rescue deal that may involve the Abu Dhabi-based airline increasing its stake from 24 per cent at present.
  10. The carrier has posted three consecutive quarterly losses.

(With agency inputs)





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Highlights

1
Jet Airways has a debt pile of more than Rs 8,000 crore
2
Airline owes money to pilots, lessors, banks and vendors
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Jet Airways' meeting with its lenders comes amid falling crude oil prices

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