The acute liquidity crunch has forced it to ground aircraft, shut down stations and delay salary payments to its pilots and engineers along with other senior staff
Mumbai: Amidst increasing differences between Jet Airways and Etihad Airways, the only party that can bailout the beleaguered airline, over the equity cap that its founder chairman Naresh Goyal can hold after his forced exit,bankers Friday exuded confidence of reaching a resolution plan as early as next week.
After agreeing to cap his shareholding at 22 percent for perpetuity and completely exit the airline's management as a precondition for a bailout that Etihad and bankers demanded, Goyal had last Friday wrote to Etihad to remove the perpetuity clause from the resolution plan and also the Gulf carrier immediately offer a lifeline of Rs 750 crore failing which the airline may get grounded.
This, according to media reports, has put off the Gulf carrier which already owns 24 percent in the airline which has grounded 42 percent of its 119 aircraft, most of them due to non-payment lease rentals to the aircraft lessors. According to the draft resolution plan submitted to the lenders led by the lead lender SBI, Etihad will bring in around Rs 1,800 crore as fresh equity and increases its stake to 24.9 percent, while Goyal will chip in with Rs 750 crore and the rest of the Rs 3,800 crore come from other investors.
Founder chairman Goyal and his family own 52 percent in the airline now which he had agreed to pare down to 22 percent to secure a financial bailout. "It is a work in progress. Very soon, say by next week, we will have a solution plan in place," a senior SBI official said here Friday.
The official said the resolution plans had started on November 1 last. "Any resolution plan for a corporate is a very complex process. Things don't happen in a day or two or in even 15 days. "There are various stakeholders, who have to be aligned; there are promoters and joint venture partners, so when the situation is so complex, it takes time," SBI explained the reason for the delay.
"We are making every effort and SBI is leading that effort. We are clear on one thing: to ensure that the airline runs and not get grounded and not to stave off our accounts becoming NPAs. That's the fundamental difference between any other NPA and Jet Airways," he added. Jet has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March.
It has already defaulted on an ECB payment earlier this week but is servicing its domestic debt. The acute liquidity crunch has forced it to ground aircraft, shut down stations and delay salary payments to its pilots and engineers along with other senior staff. Since last July the airline has been trying to raise funds as cash crunch mounted leading to salary delays since then.
On March 8, Goyal wrote to Etihad chief executive Tony Douglas seeking an urgent funding of Rs 750 crore under an agreement signed between various stakeholders. On 14 February, Jet Airways board approved a bank-led resolution plan whereby lenders would become the largest shareholders in the airline. Following approval from the shareholders, part of debt would be converted into 11.4 crore shares at a consideration of Re 1 apiece as per the RBI norms.
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