Jet Airways crisis: SBI-led consortium draws out fresh plan to revive debt-laden airline; Etihad not keen to invest more

With Naresh Goyal no more in the helm of affairs of Jet Airways, lenders led by state-run State Bank of India (SBI) has reportedly drawn out a fresh resolution plan to revamp the crisis-hit airline, according to media reports. According to Mint, the revival plan includes an equity infusion of Rs 3,800 crore by two unidentified investors and an Rs 850-crore equity infusion by SBI, Rs 485 crore on behalf of public shareholders, an additional debt of Rs 2,400 crore and non-fund-based facilities of Rs 2,000 crore. The new rescue deal also proposes the exit of Etihad, as well as large haircuts for lenders, including a write-off of debt by the domestic lenders to Jet Airways, the report said. [caption id=“attachment_3916429” align=“alignleft” width=“380”] Representational image. Reuters[/caption] A report by The Economic Times said that the lenders are planning that the remaining shareholding of Goyal and Etihad be transferred to a trust managed by the lenders with a call option on shares owned by the trust. Etihad, Jet Airways’ previous strategic partner, is not keen to invest more and hike its stake in the cash-strapped airline, said the report. As part of the resolution plan, on Monday, Goyal quit as chairman of the embattled airline along with his wife Anita and the board also approved lenders taking control as well as immediate fund infusion of Rs 1,500 crore. Last month, there were media reports that former SBI chief Arun Kumar Purwar might head the debt-ridden Jet Airways after Goyal along with his wife Anita quit the airline. Last month, an SBI official had said that the new investor in Jet Airways would have to bring in about Rs 4,500 crore capital for running the airline, said a PTI report. SBI, which is the leader of the group of 26 lenders, will invite Expression of Interest this month from buyers willing to take over the airline and will finalise the investor by May end. According to the official, there has been a lot of interest in the airline and the buyer has to bring in equity of about Rs 4,500 crore to keep it running. Indicating its improving operations, Jet Airways may fly 40 more planes by the end of April and is in talks with leasing companies to restart operating several of its grounded aircraft, a Reuters report said last month. Lenders of Jet Airways moved in to take a majority stake in the airline, which is saddled with a debt of more than $1 billion after it failed to convince potential investors to save the airline. Meanwhile, a major crisis at the struggling carrier Jet Airways was averted on Sunday after its pilot’s body National Aviator’s Guild (NAG) deferred to 15 April its call of halting operations. The decision was taken at an open house meeting of NAG members that took place both in Mumbai and Delhi Sunday afternoon, a guild source said. The loss-making airline, which is now under the ownership of SBI-led consortium of lenders following a debt-recast plan, Saturday said it could remit only the remaining amount of December salary to pilots and others. — With PTI inputs