New Delhi: A delay in interim funding, amid lender-driven stake sale and bailout plan, has cost Jet Airways (India) Ltd dear.
On Thursday, Jet Airways grounded 10 more flights due to non-payment of dues to aircraft lessors even as bidding process for up to 75% stake in the airline continued.
Jet Airways now is operating about 70 flights a day compared to over 600 flights that it used to fly daily before the financial crisis struck more than six months ago.
On 25 March, Jet Airways informed the stock exchanges about a bailout plan involving conversion of part of lenders’ debt into equity, changes in the board of directors and an “immediate interim finance from" banks to the tune of ₹1,500 crore.
This "immediate interim finance" is yet to materialize, said a person familiar with the discussions between the airline and its lenders, led by State Bank of India.
Lenders have on the other hand, have been granting small amounts of finance, which according to this person was not sufficient for the airline to manage its operations till the turnaround scheme gets executed.
Interim finance is a key element of corporate turnaround schemes as they help sustain operations of the bankrupt firm till the time new shareholders bring in capital to revive the company.
“The company is making all efforts to minimize disruption to its network...and is proactively informing and re-accommodating its affected guests. The company also continues to provide required and periodic updates to the Directorate General of Civil Aviation (DGCA) in this regard," Jet Airways said in a statement to the stock exchanges.
On Thursday, Jet Airways shares fell 1.14% to ₹260.40 apiece on the BSE while the benchmark Sensex closed little changed at 38,607.01 points.