Mumbai: Lenders to crisis-hit Jet Airways (India) Ltd were hopeful of arriving at a resolution within the next one week, a senior State Bank of India (SBI) official said on the condition of anonymity.
“In next one week you should have something. Any SBI stressed asset resolution plan will be a comprehensive plan as we do not believe in patchworks," the banker said, adding that the resolution process started in November.
Asked if lenders were concerned about the delay in the resolution process of the Jet Airways crisis, the banker said since lenders were making all efforts led by SBI to keep the airline running. “It is not because our (SBI’s) account will become NPA," he said.
“Any resolution plan for a corporate is a very complex process and things do not happen in one or two days. There are various stakeholders and you have to align and take care of all of them—lenders, promoters, JV partners."
The contours of the resolution plan were very much in place, but lenders have to tie-up couple of loose ends, he added.
Mint reported on 15 March that Etihad Airways PJSC was unlikely to agree to a provisional debt resolution plan proposed by lenders for Jet Airways, citing two people directly aware of the development.
A meeting of the board of Etihad in Abu Dhabi on Tuesday remained inconclusive, with several members expressing reservations about the terms proposed by the lenders that included adding two nominee directors from the promoter group of Jet Airways, led by founder Naresh Goyal.
Meanwhile, another contentious issue was Goyal’s demand for exclusion of the perpetuity clause, which capped Goyal’s shareholding at 22%. The provisional pact envisaged a “new investor" injecting between ₹1,600 crore and ₹1,900 crore for about 20% in Jet Airways and the Goyal-led promoter group’s stake falling to 17.1%, with a caveat seeking to cap it at 22%.
An early resolution to the financial woes is crucial for Jet Airways. More than 50 of the airline’s 119 planes are currently grounded by lessors due to non-payment of lease rentals, while it has delayed salaries to pilots and interest payments on its debt.
According to the proposed agreement, the consortium of lenders, SBI, will convert its dues into shares and pump in an additional ₹1,000 crore to raise its stake to 29.5%. Etihad was also expected to infuse between ₹1,600 crore and ₹1,900 crore to raise its shareholding to 24.9%.
Jet Airways shares ended down 0.8% on the BSE on Friday.