SBI, PNB may buy other banks‘ exposure to Jet Airways; airline pledges assets for SBI loan

Cash-strapped Jet Airways’ key lenders, including the State Bank of India (SBI) and Punjab National Bank, are likely to buy out the exposure of three domestic and one foreign lender, as they are not keen to participate in the debt-equity restructuring process. With the proposed buyout, the size of the rights issue may be increased from Rs 25 billion to around Rs 40 billion. Meanwhile, the airline has pledged its fixed deposits (FDs), existing with various banks, worth Rs 15 billion to borrow Rs 2.25 billion from SBI. The airline decided to borrow against the FDs instead of redeeming them as the deposits continue to earn a higher interest rate than what the carrier owes SBI.

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