In an apparent rescue act, Etihad Airways PJSC of Abu Dhabi has offered to guarantee loans worth $150 million that Jet Airways (India) Ltd needs to keep the airline operational, two people directly aware of discussions between the two airlines said.
The development follows several rounds of talks between the two sides which also included a potential equity infusion by Etihad Airways and adding a third Indian partner, said the two people cited above. Both requested anonymity as the talks are private.
“As an immediate measure, Etihad has agreed to stand as a guarantor for any fresh loans to be raised by Jet Airways and has engaged at least two foreign banks, one of them headquartered in UK, to syndicate the new loans,” said the first person.
“Both sides feel that an equity infusion by Etihad Airways, which already owns 24% in Jet Airways, will take time and it may not be enough for Jet Airways to tide over its current financial troubles, given Jet’s depressed valuations,” the person said. Read More