Debt-laden Jet Airways edges closer to safety after SBI-led rescue deal to plug Rs 8,500-cr funding gap

India’s Jet Airways, after several attempts at finding help to save the carrier from a crippling pile of debt, last week approved a rescue deal which will make its lenders its largest shareholders and fix a near Rs 8,500 crore funding gap. Jet Airways, which had debt exceeding Rs 8,000 crore ($1.12 billion) as of September-end, has been steadily losing market share to its rival and low-cost carrier IndiGo, which is owned by InterGlobe Aviation Ltd. The airline has also seen its share price suffer as it navigated through several negotiations with its lenders and shareholders. Jet Airways will take the resolution plan to its shareholders later in the day where it will seek their approval to convert debt into 114 million shares. Here are some major developments in Jet’s story: 3 August 2018 – Jet denies report that it cannot fly beyond 60 days, and dismisses conjecture of stake sale. 9 August – Airline defers board meet for first-quarter results. [caption id=“attachment_5554021” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] 11 August – After State Bank of India (SBI) chairman says Jet Airways’ loan is on the bank’s watch list, the airline says it is regular in payment obligations to all banks. 20 August - Sources tell Reuters that private equity firm TPG Capital is considering investing in Jet, but is not close to finalising a deal. 27 August – Jet Airways posts loss for the June-quarter, says it will inject funds and cut costs by more than 20 billion rupees in two years. 6 September – Jet Airways says it paid salaries to 84 percent of its employees after reports emerge that pilots warned ‘non-cooperation’ over salary default. 4 October – Rating agency ICRA downgrades here the company’s long term loans and NCDs. 18 October – Report says Indian conglomerate Tata Group is in talks to buy stake in Jet. Jet calls report “speculative”. 30 October - US-based Delta Air Lines Inc expresses interest to buy Jet stake from promoter Naresh Goyal and Etihad Airways. 5 November – Report says Tata aims to buy the 51 percent stake in the airline owned by Naresh Goyal, and Etihad Airways’ 24 percent stake, and merge Jet with Vistara. 12 Novemer – Jet posts third straight quarterly loss. 13 November – Tata Sons begins due diligence to buy Jet, reports say. Nov 15 – Shares surge nearly 25 percent following reports that the debt-laden airline was nearing a rescue deal with Tata Sons; another report says the Indian government asked Tata to explore buying Jet Airways. 16 November – Tata Sons says discussions on Jet is preliminary and no proposal has been made. 22 November - Independent director Ranjan Mathai resigns, citing rising pressure from other commitments. 3 December - Jet says it will stop providing free meals to most domestic economy class passengers from January. 5 December - Jet and Etihad Airways have been holding rescue talks with Jet’s bankers, sources tell Reuters. 6 December - Jet tells its pilot union it will clear all salary dues by April, a source tells Reuters. 7 December - ICRA cuts Jet Airways rating yet again. 14 December - Goyal’s penchant for control has come up as a major obstacle as the airline tries to negotiate a rescue deal, several people who have worked closely with him or known him over the years tell Reuters. 2 January, 2019 - The airline says it has delayed payment to a consortium of Indian banks, led by SBI; ICRA cuts rating again. 10 January - Jet proposes to creditors that it will catch up with debt payments in arrears by September, and from April will meet debt payments as they come due, according to a document seen by Reuters. 11 January - Some aircraft lessors were prompted to explore taking back aircraft from Jet, people familiar with the matter told Reuters. Etihad is not “in any position to sink new equity into Jet at this juncture”, says a person familiar with Etihad’s position. 14 January - Report states Goyal is likely to step down from the board and give up majority control. 16 January - TV channel reports that Etihad offered to buy Jet Airways shares at a 49 percent discount and immediately release $35 million. 17 January - Top creditor SBI says Jet’s lenders are considering a plan to resolve its debt issues, amid further reports that Goyal is willing to invest Rs 700 crore in the airline and pledge all his shares but wants to retain a 25 percent stake. 24 January - India capital markets regulator says it has no “view” on relaxing norms for a Jet Airways bailout. 25 January - Etihad appoints Alvarez and Marsal to conduct due diligence on Jet, sources tell Reuters. 30 January - Jet denies its aircraft had been grounded by GE Capital Aviation Services. 1 February - Jet agrees to most conditions set by Etihad Airways for a lifeline, a report says. 8 February - Airline grounds four aircraft after failing to make payments to lessors. 14 February - Jet’s board approves a rescue deal which will make its lenders its largest shareholders and fix a near Rs 8,500 crore funding gap 15 February - Jet is seeking an $840 million bailout from shareholders and a state-backed fund, Business Television India reports.