Cash-strapped Jet Airways has sought a soft financing of $350 million from its investment partner Etihad Airways, as it continues to hold discussions with the latter to offload additional stake in the carrier, revealed an airline source on Thursday.
The Abu Dhabi-based Etihad had come to the rescue of the Naresh Goyal-controlled Jet Airways during the earlier downturn too. In 2013, it had acquired 24 per cent stake in Jet Airways for Rs 2,060 crore, besides extending low-interest loan of $150 million as well as purchasing 50.1 per cent stake in its loyalty programme JetPrivilege.
“Jet Airways has sought $350 million soft loan from Etihad even as its discussions with the Gulf carrier continue for selling additional stake,” the source said. Etihad has, however, offered to finance as much as $200 million, the source said. “A final decision on the proposal is yet to be taken,” it added.
Both Jet Airways and Etihad refused to comment on the deal. “Etihad does not comment on rumour or speculation,” an Etihad Airways spokesperson said in an e-mail response to a news agency. A Jet Airways spokesperson too said the carrier does not comment on “speculation” in line with its policy.
With three back-to-back quarterly losses and a net debt of Rs 8,052 crore as on September 30, the airline is working on ways to raise funds and reduce costs.
Meanwhile, NRI businessman and founder of Lulu Group MA Yusuff Ali may again play a key role in the ongoing talks between Etihad and Jet Airways, sources said. In 2013 too, Ali played a crucial role in bringing the deal to a close between the two airlines. The $7.4 billion Lulu Group operates hypermarkets and malls in India and overseas.
Sources said Ali could come in as Etihad’s Indian partner, the need for which will arise if the airline decides to invest in Jet Airways, triggering an open offer. As per the government’s FDI rules, a foreign investor can own a maximum of 49 per cent in an Indian airline.