New Delhi: Debt-laden Jet Airways India Ltd. has allegedly missed the deadline of repaying loan worth $109 million to financial services company HSBC Bank this week, stated a report. In 2014, Jet Airways had obtained a loan amount totalling $140 million from the bank. The outstanding loan amount which was due on March 28, was part of a two-tranche facility, claimed sources on the condition of anonymity.
Earlier, the airline had missed the payment of a loan on the other tranche amounting to $31 million that was outstanding on March 11. Thus the sources added that the airline has not repaid any of the loans. The Indian carrier has grounded about two-thirds of its fleet due to non-payment of lease rentals as a result of severe financial crunch. In the month of January, the credit rating of the company was cut to default as it failed to clear its dues to the India lenders. The company’s status is crucial for the government as a possible collapse of the airline would put about 23,000 jobs at risk, stated Bloomberg.
Meanwhile, Jet Airways chairman Naresh Goyal and his wife Anita stepped down from the airline board, along with their two nominees and one from the Ethidad Airways PJSC on March 25. Thereafter on March 26, the interim management of the cash-strapped airline, led by State Bank of India (SBI) chalked out a plan in consultation with the Civil Aviation Ministry to address the disbursal of pending salaries of employees, said reports. Another key issue was getting the grounded planes operational by paying the lessors and vendors.
As an emergency debt funding for the airline, lenders were under the obligation to infuse nearly 15 billion rupees ($217 million). During an exchange filing, Jet Airways reportedly said that the delay in repaying the external commercial borrowing due on March 28 was because of temporary liquidity constraints.