Debt-ridden Jet Airways says it does not have money to pay interest to debenture-holders

Mumbai: Struggling Jet 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 debt servicing on January 2 when it defaulted on repayments on its external commercial borrowings. The airline, which has a debt of over Rs 8,000 crore, did not specify what the quantum of interest due Tuesday nor quantum of the debt on this particular account. “The payment of interest due on 19 March to the debenture holder will be delayed owing to temporary liquidity constraints,” Jet 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. [caption id=“attachment_5554021” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Following this, the airline has indefinitely suspended its operations from Abu Dabhi, one of its two global gateways the other being one in Amsterdam. Jet Airways has been struggling to mop up cash to carry out operations. On 14 February, its board approved a bank-led- resolution plan, whereby lenders would become the largest shareholders in the airline and chairman Naresh Goyal 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 the debt-ridden full-service carrier by this week. On March 8, Goyal wrote to Etihad Airways group chief executive Tony Douglas 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.