Mubasher: Indian airline Jet Airways announced that it has managed a $300 million credit facility negotiations from New Delhi-based Punjab National Bank (PNB) - a leading member of the carrier’s banking consortium.

The loan will be used to meet the airline’s working capital requirements, sources in the banking sector told Arabian Business.

The company has cancelled numerous flights in the recent weeks, including some operations to Dubai due to the grounding of its aircraft and working capital crunch.

Such problems are affecting the company’s operations and payment defaults to its vendors and aircraft leasing companies, resulting in 28 of its leased planes grounded.

The loan is divided into two tranches, the first one valued at $157 million by way of foreign currency term loan and another $136 million by way of non-fund-based credit.

Non-fund-based credit facilities include offering letters of credit (LCs) and bank guarantees.

PNB’s credit facility to the Indian carrier is linked to tight conditions, including Jet Airways creating a trust and retention account (TRA) by entering into a tripartite agreement with PNB and ICICI Merchant Services Pvt Ltd.