Jet Airways to reduce debt by $400 m this FY
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Naresh Goyal-promoted Jet Airways (India), which beat street expectations on Friday by posting a lower loss than anticipated, told analysts on Monday that it will reduce its debt by a further $400 million (about R2,200 crore) by end-March 2013.
"We have cash and cash equivalents of $125.1 million or R640 crore," Sudheer Raghavan, chief operating officer of Jet told analysts at a conference call on Monday. "We have a debt of $2.3 billion on our balance sheet which we plan to reduce to $1.96 billion by March 2013."
The airline, which had a debt of $2.6 billion or around R14,000 crore in March 2012, has repaid nearly R2,000 crore during the course of the current fiscal and is set to get an increase in its working capital credit limit from its bankers.
"We have applied for an increase in the credit limits to our consortium of bankers," said Ravi Shankar G, CFO of Jet. "This should be approved by the end of this month with an average interest rate of 11-12% for both rupee and dollar loans."
Shankar clarified that the interest rates were low because they were a mix of dollar loans backed up with good securities and unsecured rupee loans.
"On the higher end the interest rates would be 13-14% for rupee loans while it would be 7-8% for the secured dollar loans," he said, adding that the final details would depend upon the securities offered by the airline.
The repayment of loans will be helped by the airline's plan to lease out its three grounded Airbus A330-300s.
"We should get $1 million for each aircraft each month," said KG Vishwanath, vice-president (commercial strategy and investor relations).
Operationally, Jet is confident of getting good passengers heading into quarter three, a peak season. "Having seen the traction in the forward bookings we have dedicated more of our capacity to full-service Jet operations, moving it away from low-cost Jet Konnect," said Raghavan.