You are here: Home » Companies » News
Business Standard

Jet Airways says no money to pay interest to debenture-holders on Tuesday

The acute liquidity crunch has forced Jet to ground aircraft, shut down stations and delay salary payments to its pilots and engineers along with other senior staff

Press Trust of India  |  Mumbai 

Etihad control won't hit Jet ties abroad

Struggling Airways Monday said it does not have the money to pay interest to its debenture-holders, due Tuesday.

This is the second time the airline is defaulting on its foreign servicing since January 2, when it defaulted on repayments on its external commercial borrowings.

The airline, which has a of over Rs 8,000 crore, did not specify what the quantum of interest due Tuesday nor quantum of the on this particular account.

"The payment of interest due on March 19 to the holder will be delayed owing to temporary liquidity constraints," Airways said in an exchange filing Monday.

The acute liquidity crunch has forced it to ground aircraft, shut down stations and delay salary payments to its pilots and engineers along with other senior staff.

The airline has, so far, grounded 41 of its planes only on account of non-payment of lease rentals. These don't include other planes which have been taken out of operations owing to non-availability of funds for maintenance.

Following this, the airline has indefinitely suspended its operations from Abu Dabhi, one of its two global gateways the other being one in Amsterdam.

Airways has been struggling to mop up cash to carry out operations.

On 14 February, it board approved a bank-led- resolution plan, whereby lenders would become the largest shareholders in the airline and chairman would leave the airline.

Following approval from the shareholders, banks would convert a part of the debt into 11.4 crore shares at a consideration of Re 1 apiece as per the RBI norms.

Last week, SBI sounded hopeful of reaching an early solution for debt-ridden full-service carrier by this week.

On March 8, Goyal wrote to group chief executive seeking urgent funding of Rs 750 crore under an agreement signed between various stakeholders.

Etihad, however, has reportedly not taken a final decision on the pact.

First Published: Mon, March 18 2019. 16:15 IST
RECOMMENDED FOR YOU