Jet Airways (JAI, Mumbai International) has reached an agreement with its 24% owner Etihad Airways (EY, Abu Dhabi International) wherein the Emirati carrier will provide a guarantee for new loans of USD150 million for Jet Airways, the Financial Express has reported.
Etihad will also reportedly talk directly with Indian banks to expedite the loans and overcome the general suspicion as to Jet Airways' ability to repay the borrowings.
The deal is an interim one and a step towards a further equity injection by Etihad. The carriers are currently negotiating to raise the Emirati airline's stake to 49% through new investment. The proposal is contentious as it would decrease the stake of the airline's main backer, Naresh Goyal, who currently controls 51% of shares.
Meanwhile, the carrier is also facing a forensic audit ordered by State Bank of India, one of its main creditors.
At the end of September 2018, Jet Airways had around INR81 billion rupee (USD1.1 billion) in debts, with over INR15 billion rupees (USD210 million) due for repayment by the end of March 2019.
