London: An entity set up to finance affiliates of Etihad Airways PJSC said Jet Airways India Ltd has become the third carrier in the group to fall behind on interest payments.
EA Partners I, a vehicle created in 2015 to allow Etihad to provide funds to airlines in which it owned stakes, said in a statement that Jet Airways failed to make a payment on 19 March on account of 'temporary liquidity constraints.'
Etihad set up two vehicles, EA Partners I and II, which sold $1.2 billion of bonds to raise funds for several airlines. The structure was designed to provide financing for the airlines while minimising the burden on the balance sheet of their Abu Dhabi-based parent company.
The airlines each guarantee as much as 20% of the bonds, making regular contributions into a cash pool from which coupons are paid to investors who bought the securities.
EA Partners I’s $700 million of bonds maturing in September 2020 have been trading at about 40% below face value after two other airlines in the group, Air Berlin and Alitalia, started insolvency proceedings in 2017. Etihad owns a 24% stake in Jet Airways.
Creditors have challenged Etihad, saying it misled them on the extent to which it would support its part-owned carriers, people familiar with the matter said in October.
Also read: Strategic investors with ₹1,000 crore net worth can bid for Jet Airways
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed
