March 11, 2019 / 4:22 AM / 7 months ago

India's Jet Airways denies report of new $293 mln loan from PNB

FILE PHOTO: A Jet Airways plane is parked as another moves to a runway at the Chhatrapati Shivaji International airport in Mumbai, India, February 14, 2018. REUTERS/Danish Siddiqui/File Photo

NEW DELHI (Reuters) - India’s debt-laden Jet Airways Ltd denied a media report on Monday that it had secured a 20.50 billion rupee ($293 million) loan from state-owned Punjab National Bank (PNB) to help pay overdue plane leasing fees and salaries.

The airline, which has had to ground planes after failing to make payments to leasing companies and is behind on paying pilots’ wages, said in a statement to the stock exchange that it has an existing credit facility of $300 million from PNB and that the bank has not provided any fresh credit.

Indian daily Mint had reported earlier on Monday that Jet had secured foreign currency term loans worth 11 billion rupees and a credit facility of 9.50 billion rupees from PNB for its working capital needs, citing an unnamed source.

Jet Airways is saddled with more than a billion dollars in debt and its shares jumped 4.8 percent after Mint’s report to 255 rupees, their highest level in over a month. They ended the day 1.7 percent higher in a strong Mumbai market.

The airline issued its statement after the market close. PNB did not respond to a request for comment.

Jet is struggling to make payments to banks, aircraft leasing companies, vendors and pilots.

Some leasing companies have forced the airline to ground more than two dozen planes from its fleet of about 120 aircraft prior to potentially moving them out of India as scepticism builds over whether a planned state-led bailout of the carrier can clear their dues on time.

Jet Airways has outlined a draft plan to sell a majority stake to a consortium led by the State Bank of India at 1 rupee, under regulations that permit banks to convert debt to equity in a defaulting firm.

The stake sale will be followed by an equity raising, debt restructuring and the sale and leaseback of jets to help plug a $1.2 billion funding gap, but the plan needs approvals from several stakeholders, including major shareholder Etihad Airways.

Reporting by Aditi Shah in New Delhi and Tanvi Mehta in Bengaluru, Editing by Sherry Jacob-Phillips and Susan Fenton

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