Jet Airways faces imminent shutdown without emergency funds from lenders: Report

Jet’s management had advised the airline’s board to temporarily suspend the company’s operations, according to reports

Reuters April 17, 2019 09:12:26 IST
Jet Airways faces imminent shutdown without emergency funds from lenders: Report
  • Bankers and an Indian government official said lenders are trying to line up funds to keep aloft the once-dominant Indian airline

  • Jet Airways shares slumped to their lowest levels since August 2015.

  • Jet’s management had advised the airline’s board to temporarily suspend the company’s operations, according to reports

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 Airways faces imminent shutdown without emergency funds from lenders Report

A Jet Airways aircraft. 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.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Jet Airways may see a rise in debt over next two quarters, could be a short-term blip, says CFO Amit Aggarwal
Business

Jet Airways may see a rise in debt over next two quarters, could be a short-term blip, says CFO Amit Aggarwal

With Jet Airways incurring a huge fourth-quarter loss of Rs 1,036 crore on high oil prices and weaker rupee, its auditors have said the "appropriateness of assumption of going concern" for the company depends on its ability to raise necessary funds, among other factors.

Vinay Dube joins Jet Airways as new CEO after security clearance
Business

Vinay Dube joins Jet Airways as new CEO after security clearance

Under Vinay Dube's leadership, Naresh Goyal, Chairman, Jet Airways said the airline would accelerate the momentum of turning around the company as well as deepen relationship with strategic partner Etihad Airways.

Govt sees little hope of a bidder emerging for debt-laden Jet Airways; could face bankruptcy proceedings: Report
Business

Govt sees little hope of a bidder emerging for debt-laden Jet Airways; could face bankruptcy proceedings: Report

Jet’s borrowings are small compared to those of other big defaulters such as Videocon and some steel companies, so lenders likely can wait for some more time before commencing bankruptcy proceedings,