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Monday
May 2019
1:53 AM IST
News Headlines
Blast near tourist bus injures at least 17 in Egypt        Bravo, Pollard named in W Indies reserve players list for World Cup 2019        Opposition unity: Naidu meets Akhilesh, Mayawati over opposition unity post LS polls        I could be assassinated like Indira Gandhi, BJP after my life: Kejriwal        LS polls candidate attacked in Kerala        UK gets new weapons act, secures Sikh right to carry kirpans        Austrian far-right leader resigns over ''Ibiza affair''        Kedar Jadhav declared fit for 2019 World Cup        Bayern roll 5-1 over Frankfurt to clinch their 7th successive Bundesliga title        Modi is an actor, says Priyanka; compares him to Asrani in Sholay        Every religion has its own terrorist: Kamal Haasan        Modi locked up entire cabinet before demonetisation: Rahul        Afghan security forces killed in US strike in Helmand        Trump says he hopes for no war as US-Iran tensions escalate        Irfan Pathan becomes first Indian to enroll for Caribbean Premier League Players Draft        Rahul Gandhi meets Alwar gang-rape victim; says she will get justice        EC orders repolling in four booths in Kasaragod, Kannur on May 19        Cong not averse to supporting regional party leader for PM post: Ghulam Nabi        Pragya Thakur apologises for calling Godse a ''patriot''        Iran''s Zarif says ''no possibility'' of talks with US: Kyodo        
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Business News
Crisis-hit Jet Airways defaults on foreign loan repayment
 
New Delhi/Mumbai: Cash-strapped Jet Airways Monday defaulted on foreign loan repayment due to liquidity crunch, amid chairman Naresh Goyal seeking Rs 750 crore in urgent funding from its strategic partner Etihad Airways citing the airline''s "very precarious" position.

The domestic airline, which has been in service for 25 years, has been grappling with acute financial woes that have forced it to ground around 50 planes while salaries of many employees have been delayed. "... the part repayment of the external commercial borrowing availed by the company, for working capital purposes, falling due on March 11, 2019, has been delayed owing to temporary liquidity constraints," the airline said in a filing to stock exchanges. Specific details about the borrowings were not disclosed.

The company has engaged with the lender in relation to the same, the filing added. The development also comes on a day when Etihad Airways, which has 24 per cent stake in Jet Airways, is holding its board meeting in Abu Dhabi. Jet Airways has a debt burden of more than Rs 8,000 crore and has been looking at various ways to raise funds. On March 8, Goyal wrote to Etihad Airways Group CEO Tony Douglas seeking an urgent funding of Rs 750 crore.

In a letter, Goyal also said the airline has also secured the go-ahead from the civil aviation ministry to pledge its shares in JetPrivilege for securing the interim funding. The airline holds 49.9 per cent stake in the loyalty programme JetPrivilege while the majority is with Etihad. According to the letter, Jet Airways is in a very precarious position, with more than 50 aircraft being grounded and increasing arrears of vendors and salaries. Etihad Airways is likely to infuse around Rs 1,600-1,900 crore into cash-strapped Jet Airways under a proposed deal wherein Goyal would step down as chairman of the domestic carrier, according to sources. Under a proposed deal, Goyal would step down as chairman and director of Jet Airways but can nominate two people to the airline''s board. Goyal would be designated as chairman emeritus while his son Nivaan Goyal would be offered an appropriate executive position subject to certain conditions, the sources said.

By infusing Rs 1,600-1,900 crore, Etihad''s stake in Jet Airways would rise to 24.9 per cent, the sources said citing a Memorandum of Understanding (MoU) between the two airlines. Currently, Etihad has 24 per cent stake in the domestic airline. Besides, a new investor is likely to pump in around Rs 1,600-1,900 crore into the domestic carrier. Lenders are expected to infuse Rs 1,000 crore wherein their shareholding would be around 29.5 per cent, as per the sources. In the revamped board, there would be a total of 12 members, including two nominees each of Goyal and Etihad, they added. Last month, shareholders of Jet Airways cleared approved conversion of loan into shares and other proposals.

On February 14, Jet Airways'' board approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline. Following approval from the shareholders, part of debt would be converted into 11.4 crore shares at a consideration of Re 1 apiece as per the RBI norms. On Monday, shares of Jet Airways Monday settled with over 2 per cent gains following reports that it has secured loan worth over Rs 2,000 crore from Punjab National Bank (PNB).

In a clarification to stock exchanges, the airline said it has existing credit facilities of USD 300 million from Punjab National Bank. No fresh credit facilities, as reported, have been provided by the bank, it added. Separately, on Monday, Jet Airways said it is not operating any of the five Boeing 737 MAX in its fleet. The statement of the airline came against the backdrop of aviation regulator DGCA asking airlines to undertake safety assessment of 737 MAX aircraft following the crash of such a plane in Ethiopia on Sunday.


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KERALA NEWS
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INTERNATIONAL NEWS
Blast near tourist bus injures at least 17 in Egypt
 Cairo: A bomb exploded near the New Egyptian Museum, close to the Giza Pyramids in Egypt on Sunday,
UK gets new weapons act, secures Sikh right to carry kirpans
Austrian far-right leader resigns over ''Ibiza affair''
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NATIONAL NEWS
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