Jet Airways, the Indian airline that last month sold a 24 percent stake to Etihad Airways for $380m, is reportedly seeking to raise $150m in the next two months via the Abu Dhabi carrier’s banking network.
Jet will look to tap the cash at 3 percentage points above the London interbank offer rate (Libor), a senior executive at the operator told the Wall Street Journal. That rate is substantially below the average annual rate of 12 percent that Jet currently pays on its loans.
"Etihad is going to help us out. They will be facilitating the loan through their banking environment," the anonymous executive told the paper.
All of the $150m would be raised in a lump sum with a maturity of three years, they added.
Jet will also seek to raise an additional $150m in overseas funds at a later stage, although this will not be via Etihad, the executive added. Jet, controlled by billionaire Indian Naresh Goyal, is about $800m in debt.
The stake sale to Etihad is the first example of such a deal following the Indian government’s decision to permit overseas carriers to purchase stakes of up to 49 percent in the country’s carriers.