Published: January 8, 2015
Jet Airways CEO says US$150mn loan will be “instrumental” on path back to profit.
Jet Airways, India’s second-largest carrier by market share, has secured a five-year loan facility worth US$150mn from five Middle Eastern banks.
Mashreq Bank was initial mandated lead arranger and bookrunner, with Abu Dhabi Commercial Bank, Commercial Bank International (Abu Dhabi), Ahli United Bank and Arab Banking Corporation also participating. Alpen Capital, a Gulf-focused boutique investment bank, advised the airline on the transaction.
Jet Airways’ chief executive, Cramer Ball, said of the loan: “We will continue to build on this strong foundation as part of our three-year turnaround plan. This syndicated loan facility will be instrumental in underpinning the airline on this progressive path.”
The turnaround plan, designed to bring the firm back to profitability after three years of losses, was announced in July 2014 as high fuel costs, a weak global economy and the rise of low-cost competition in India saw margins squeezed.
The plan was instigated by the entry of Abu Dhabi carrier Etihad, which eight months earlier bought a 24% stake in the Indian carrier. International operations currently account for 45% of Jet’s business, with the firm looking to grow that to 63% by 2015 on the back of the new routes and expanded fleet its new shareholder brings.