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Jet stocks sink as investors react to suspension
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SME Times News Bureau | 18 Apr, 2019
Jet Airways scrips tanked over
30 per cent on the BSE during the early trade on Thursday, after
"temporary suspension of domestic and international operations" over the
refusal of lenders to provide emergency funding.
"It was
informed by the State Bank of India (SBI), on behalf of the consortium
of Indian lenders, that they are unable to consider its request for
critical interim funding," the company said on Wednesday in a regulatory
filing.
Reacting to this, Jet fell out of favour among
investors, falling as much as 30 per cent on the BSE. On NSE, its scrips
fell to its 52-week low, declining over 34 per cent.
At 1.07 p.m., Jet Airways on the NSE was trading at Rs 177. 40 apiece, down Rs 63.10 or 26.24 per cent.
The
company said on Wednesday that since "no emergency funding from the
lenders or any other source is forthcoming, the airline will not be able
to pay for fuel or other critical services to keep the operations
going".
"This decision has been taken after a painstaking
evaluation of all alternatives that were made available to the company
and after receiving guidance and advice on the same from its Board of
Directors," Jet said in a BSE filing.
On the future course of
action to revive the airline the company informed that it now awaits the
bid finalisation process by SBI and the consortium of Indian lenders,
which will conclude on May 10.
While the Jet Airways stocks
tanked heavily on Thursday after being somewhat resilient despite the
turmoil, SpiceJet scrips have been gaining for the last five session
advancing, surging 47.59 per cent in the period. Indigo has advanced
15.26 per cent in the last six sessions.
Both eyeing larger market share after Jet was temporarily grounded.
A
Kotak report on Wednesday said that assuming eventual full termination
of Jet's operations, Indigo will definitely see market share increase,
particularly since it has aggressive plans of capacity addition.
"However,
we note that other airlines also have significant capacity addition
plans this time each of SpiceJet, GoAir, Vistara and AirAsia have
capacity addition plans," the report noted.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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