Jet raises $200 Million from Indian banks

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Mumbai: In a bid to meet its working capital requirements, Jet Airways, which has been in the midst of a cash crunch for a while now, has raised about Rs 1,000 crore ($200 Million) from a South-Indian bank and a nationalised bank.

According to the sources, both the banks have issued letters of credit to the airline.

It is unknown whether Jet Airways will pledge company shares or any kind of collateral for the transaction. Jet Airways owes Rs 1,057 crore to large oil firms-Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum. As it is reported, Jet Airways and Jetlite have defaulted on a payment of Rs 32.78 crore to AAI, and hence the airline desperately needs the funds to pay off AAI. Civil aviation minister Praful Patel had given instructions to AAI to take all possible steps, including legal action, if warranted, against all defaulting airlines.

The deal with the two Indian banks was sealed last week confirmed a Jet Airways executive, but he declined to share details. Naresh Goyal, the airline's chairman, is reportedly negotiating with overseas-based institutions for debt funding at higher interest rates.

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