Naresh Goyal, Etihad must salvage cash-strapped Jet Airways: Lenders

The Jet Airways' resolution plan has to be put to work this month itself

Lenders to cash-strapped Jet Airways on Thursday asked two key stakeholders — Naresh Goyal and Etihad — to promptly pitch in with their contribution to salvage the situation. The decision to provide emergency funds to the ailing airline will be taken collectively and not on a standalone basis, said lenders.

“We have made our stand clear. We (lenders) are supporting the arrangement (resolution). Let us see the resp­onse from other stakeholders. We will accordingly take a call,” said Dinabandhu Mohapatra, managing director (MD) and chief executive officer (CEO), Bank of India (BOI), on the sidelines of a banking seminar organised by the IBA.

Sunil Mehta, MD & CEO of Punjab National Bank, said lenders were going (on decision to lend further to Jet Airways) coll­­­ectively. The resolution will come with the participation of the stakeholders, he added. 

On the emergency funding to the loss-making carrier, the BOI chief said lenders had made it clear that all stakeholders should pitch in. Two senior executives of the other two public sector banks said time was running out. The situation is looking grim as more and more Boeing 737 MAX 8s are being grounded. The resolution plan has to be put to work this month itself.

Jet has a debt of over Rs 8,000 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. The airline has, however, already defaulted on repayme­nts on external commercial borrowings due to paucity of funds. 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. It has been looking at various ways to raise funds.

Last month, shareholders of Jet Airways approved conversion of loans into shares and other proposals. On Febr­uary 14, the Jet board appr­oved a bank-led provisional resolution plan, whereby len­ders would beco­me the largest shareholders in the airline.

Following approval from shareholders, a part of the debt would be converted into 114 million shares at a price of Rs 1 apiece, according to the Res­erve Bank of India norms.