Jet Airways gets Rs 700 cr fresh funds from Etihad, may refinance debt

New Delhi: Jet Airways has received nearly Rs 700 crore fresh investment from a special purpose vehicle created by its strategic partner Etihad and the funds are likely to be utilised for refinancing debt. Abu Dhabi-based Etihad Airways currently holds 24 percent stake in the domestic carrier.[caption id=“attachment_2351690” align=“alignleft” width=“380”]  Capital infusion in Jet Airways. Reuters[/caption] Jet Airways today said it has issued nearly Rs 700 crore worth non-convertible debentures on private placement basis. Sources said EA Partners IBV, which is a special purpose vehicle formed by Etihad Airways with its equity partners, has subscribed to the non-convertible debentures. The funds are likely to be used by Jet Airways to refinance existing debt. The group had an overall debt of Rs 11,072 crore or about $1.74 billion at the end of June. EA Partners IBV has been floated by Etihad Airways along with its airport services business – Etihad Airport Services – and five of its equity partners. The five entities are Jet Airways, airberlin, Air Serbia, Air Seychelles and Alitalia. According to a regulatory filing today, allotment of 6,989 redeemable non-convertible debentures on private placement basis was approved by Jet Airways’ committee of directors at its meeting on Wednesday. The committee has allotted “6,989 rated, listed, taxable, unsecured, redeemable non-convertible debentures (NCDs) of Rs 10,00,000 each for cash at par aggregating Rs 698.9 crore on private placement basis,” the filing said. Earlier this month, EA Partners IBV raised $700 million. Etihad had said in a release the funds would be divided across the seven businesses and used for a mixture of capital expenditure and investment in fleet, as well as for refinancing, depending on each airline’s individual needs. Allocation of the funds raised will be nearly 20 percent each to Etihad Airways, Etihad Airport Services, airberlin and Alitalia, 16 percent to Jet Airways and the remainder to Air Serbia and Air Seychelles, it had said. Etihad purchased 24 per stake in Jet Airways after the Indian government allowed overseas carriers to invest up to 49 percent in domestic airlines in 2012. Jet Airways reported a consolidated net profit of Rs 226.4 crore for the first quarter ended 30 June, helped by higher revenues and increase in passenger traffic. It had posted a loss of Rs 258 crore in the same period a year ago. In the first quarter of the current financial year, the airline saw its revenues jump to Rs 5,658 crore compared with Rs 5,097 crore in the year-ago period. Shares of the airline today fell nearly 1 percent to close at Rs 321.95 on BSE. PTI