Mumbai: The lenders meet to resolve the crisis in Jet Airways (India) Ltd, appeared to have ended inconclusively with neither of the companies involved, Jet Airways and Etihad Airways PJSC, issuing any statement at the end. Ahead of the meeting, Jet Airways said it was discussing a resolution plan with State Bank of India (SBI) and stakeholders. The plan contemplates options on the debt-equity mix, proportion of equity infusion by stakeholders and change in the airline’s board.
While few details emerged from the meeting, officials said that Etihad wanted promoter and founder Naresh Goyal to reduce his stake to 20% while being given a board seat. The Abu Dhabi-based airline also sought to put in place a professional management. One person aware of the meeting’s proceedings said that Goyal was “amenable" to this, but the resolution is still being worked out.
The Mumbai-based carrier, meanwhile, has halted deliveries of Boeing Co. 737 Max planes, said a person with direct knowledge of the matter.
Civil aviation secretary Rajiv Narayan Choubey said the government is aware of ongoing talks between lenders and promoters of Jet Airways.
He said the government has not yet received any request from Etihad Airways for an exemption from making an open offer to shareholders of Jet Airways. According to media reports, the Abu Dhabi-based carrier is interested in raising its stake in Jet Airways from the current 24% to 49%—the foreign ownership limit for a local carrier.
“Matter of open offer exemption is for Jet Airways, Etihad Airways, Sebi to discuss," Choubey said.
Jet Airways, however, denied media reports on any communication by Etihad Airways to SBI, which is leading a group of domestic lenders, concerning a resolution plan for the carrier.
“At the outset, we hereby categorically state that nothing mentioned in the various media reports shall be deemed to be attributed to the company and we also vehemently deny any discussions or disclosure on our part, with any media concerning the matter," it said in a statement.
The airline said it along with its stakeholders are working on a comprehensive resolution plan towards a turnaround for sustained growth and restoration of financial health. It added that the resolution plan “contemplates various options on the debt-equity mix, proportion of equity infusion by the various stakeholders and the consequent change in the composition of the company’s board of directors."
Choubey said the government is yet to be apprised of any plan to resolve the debt of Jet Airways.
“Under no circumstances will substantial ownership, effective control be busted. Also, only after they (Jet Airways and lenders) agree on a resolution plan, can they approach RBI, Sebi, DGCA and government," he added.
Jet Airways, which was scheduled to take delivery of 11 737 Max planes by March, has so far received five planes. “Jet Airways’ delivery of 737 Max planes are currently on hold pending approval of the airline’s turnaround plan," said the person, requesting anonymity.
“Jet Airways would like to clarify that some of your source-based observations are factually incorrect. The airline stands committed towards its overall order of 225 fuel-efficient Boeing 737 MAX aircraft and till date, has inducted 5 of these aircraft in its fleet and is on course to induct the remaining soon," the airline’s spokesperson said in an email.
Dinesh Keskar, Boeing’s senior vice president, sales, for Asia Pacific and India at Boeing Commercial Airplanes said the company has “delivered the airplanes to the lessors and now it’s up to the lessors and Jet Airways to decide." “The airplanes are painted in Jet Airways colours and in configuration that was ordered by Jet Airways," he said.
On Wednesday, Jet Airways shares fell 7.95% to ₹ 271.00 apiece on the BSE while the benchmark Sensex closed flat at 36,321.29 points.