Mumbai/New Delhi: Jet Airways Ltd will be forced to shut down as soon as Wednesday if it does not get emergency funding from its lenders, two sources familiar with the matter said on Tuesday.
Bankers and an Indian government official said lenders are trying to line up funds to keep aloft the once-dominant Indian airline, whose shares earlier on Tuesday slumped to their lowest levels since August 2015.
Another source said Jet’s board had authorized its chief executive Vinay Dube to go back to its main lender State Bank of India (SBI) one last time to plead for emergency funds.
“If we don’t get funds today, the airline will have to shut down immediately,” a senior company source told Reuters.
Jet, which did not respond to requests for comment, saw its shares fall by as much as 18.5 percent on Tuesday after media reported that Jet’s management had advised the airline’s board to temporarily suspend the company’s operations.
In a regulatory filing late on Tuesday, Jet said: “In view of the critical liquidity position of the company, its operations have been severely impacted.” The carrier said it was awaiting “emergency liquidity support” from its lenders.
Dube, in a letter to employees late on Tuesday that was seen by Reuters, said Jet has stressed to its lenders the need for urgent funding, critical to the continuation of its operations.
Earlier on Tuesday, Indian business channel BTVI said Jet’s board had authorized Dube to seek a minimum of 4 billion rupees ($58 million) in interim funding, and had advised him to ground the airline if no funds materialized.
Separately, ET Now reported that the Export–Import Bank of the United States (EXIM) had recalled all loans to Jet and was seeking to repossess all the planes it funded.
EXIM did not respond to a request for comment.
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Updated Date: Apr 17, 2019 09:12:26 IST