Cash-strapped Jet Airways pledges fixed deposits worth Rs 1,500 crore with SBI to borrow Rs 225 crore
Lenders were not willing to sanction a term loan to Jet Airways without gaining exclusive rights on its interest-yielding cash deposits or appreciating assets
Jet Airways can borrow additional amounts from SBI with the same FDs as security
SBI and Punjab National Bank are likely to buy out the exposure of other small lenders
Jet Airways has been grappling with financial woes and is looking to rejig debt as well as raise funds
Beleaguered carrier Jet Airways has reportedly pledged its fixed deposits (FDs) worth Rs 1,500 crore with State Bank of India (SBI) to borrow Rs 225 crore, a media report said.
Lenders were not willing to sanction a term loan to the cash-strapped airline without gaining exclusive rights on its interest-yielding cash deposits or appreciating assets, according to Mint.
The news report added that Jet Airways can borrow additional amounts from SBI with the same FDs as security.
Meanwhile, a Business Standard report said that SBI and Punjab National Bank are likely to buy out the exposure of other small lenders, which are reluctant to participate in the restructuring plan.
"In a discussion among the lenders' consortium, it has arisen that at least three Indian lenders and one foreign bank are not willing to participate in the debt-equity restructuring process..," a banker aware of the development was quoted as saying by the newspaper.
Jet Airways has been grappling with financial woes and is looking to rejig debt as well as raise funds. On 14 February, Jet Airways board had approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline.
Its shareholders have also approved the conversion of loan into shares and other proposals during the Extraordinary General Meeting (EGM) on 21 February.
Last week, Jet Airways chairman Naresh Goyal Friday urged his employees to bear with him in the "difficult situation" that the airline is going through for some more
time and said he was willing to make any "sacrifice" to keep the airline afloat.
In an emotional letter, Goyal also assured his employees of keeping them abreast of all the developments in the wake of the airline's rescue plan by the lenders, which has already been approved both by the board and shareholders.
"The deep emotion... leads me to appeal to each of you from my heart, to bear with me through this difficult situation a little longer, till we emerge out of turbulence and fiscal challenges, into clear blue skies," Goyal said in the letter.
Jet Airways on Friday said its debt recast plan also contemplates appropriate governance structure including board composition, among other measures.
"...Along with the restructuring of the company, the Bank Led Provisional Resolution Plan (BLPRP), inter alia, also contemplates appropriate governance structure including Board composition," Jet Airways said in regulatory filing.
--With PTI inputs
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