Jet seeks RBI nod to raise dollar debt abroad

Jet Airways, India’s largest passenger airline, said it had approached the Reserve Bank of India (RBI) to raise funds abroad in dollars at lower rates of interest.

It issued a statement saying so in response to Business Standard’s report (‘Our debt needs no help: Jet Airways’) published on Monday.

The BS report had said the airline had disassociated itself from a move by the Indian Banks Association (IBA) to restructure the ballooning debts of the aviation industry as a whole. IBA had approached the Reserve Bank of India (RBI) with a request to clear such a proposal, aimed at restructuring the short-term debt of major airlines.

The restructuring had envisaged a two-year moratorium on payment of short-term debt, lower interest rates and conversion of part of the debt into external commercial borrowings or cumulative convertible preference shares.

In its statement issued by Executive Director Saroj Datta, the airline company said it had consistently paid its debts and other servicing obligations on a timely basis and, therefore, had not sought any assistance for “complete debt restructuring” from their lenders and guarantors.

The statement added that unlike in markets abroad, where airlines had access to short-term and long-term funds at an economic cost, the borrowing costs in India continued to be high.

And, that although aviation turbine fuel (ATF) prices had remained fairly stable, the sales tax levied by states, besides other levies, had increased ATF costs and hence the operating costs of all airlines.