Mumbai: Lending major State Bank of India (SBI) will meet key stakeholders of the beleaguered Jet Airways to take the proposal to convert a part of the company’s loans into shares forward and iron-out any difference over the plan, sources said on Tuesday.
According to sources, the lending major will meet Jet Airways’ Chairman Naresh Goyal and Tony Douglas, Chief Executive Officer Etihad Airways, which is another key stakeholder in the airline on Wednesday.
Other lenders in the consortium are also expected to be a part of the meeting which is to be held at the bank’s headquarters here.
On February 25, in a joint statement both Goyal and Douglas said: “Jet Airways, its principal shareholders including Etihad Airways, and key financial stakeholders are working towards the finalisation and subsequent implementation of the Bank-led Provisional Resolution Plan (BLPRP), to ensure that the carrier emerges as a financially strong and resilient airline.”
“As we move forward, we are confident that once the BLPRP is finalised and implemented, Jet Airways will reemerge as a viable and robust airline to reclaim its rightful place as the airline of the first choice for its customers.”
Last week, Jet Airways’ shareholders had approved a the BLPRP. As part of this, public sector lenders will become the largest equity owners of the airline, virtually making it a nationalised carrier.
The proposal, an attempt to relieve the financial strain on the passenger carrier, was put forth to the shareholders at the Extraordinary General Meeting held here last Thursday.
The shareholders’ approval came after Jet Airways Board approved the BLPRP on February 14.
“The BLPRP currently estimates a funding gap of Rs 8,500 crore (including proposed repayment of aircraft debt of Rs 1,700 crore) to be met by appropriate mix of equity infusion, debt restructuring, sale or sale and leaseback or refinancing of aircraft, among other things,” the company said in a regulatory filing to the BSE on February 14.
As part of a provisional resolution plan, the airline’s Board has agreed to allot 11.4 crore shares at an aggregate value of Re 1 to the lenders’ consortium led by the State Bank of India, according to the airline.
Recently, Jet Airways reported Rs 587.7 crore as the standalone net loss for the third quarter ended December 31, 2018. It had reported a net profit of Rs 165.25 crore during the year-ago period.
The private carrier on January 1 defaulted in paying interest and instalments on loan repayments due to banks, following which rating agency ICRA downgraded both short and long-term credit facilities of the airline.