Mumbai: Jet Airways (India) Ltd's outgoing chairman Naresh Goyal has sought an urgent funding of ₹750 crore from equity partner Etihad Airways PJSC, citing "the very precarious" position of the airline. The move comes amid the airline's lingering cash flow issues, which got amplified after the forced grounding of over 50 of its planes.
In a letter to Etihad chief executive Tony Douglas, Goyal said Jet Airways has secured the go-ahead from the aviation ministry to pledge its shares in Jet Privelege Pvt. Ltd for securing the interim funding. Jet Airways holds 49.9% stake in the loyalty programme, while the majority is with Etihad.
"I now look forward to your support and cooperation in saving the airline by an urgent fund infusion of ₹750 crore by early next week, so that a matching contribution from banks is also disbursed, as per the resolution plan," Goyal said in the letter dated 8 March.
Etihad Airways' board is meeting in Abu Dhabi on Monday to discuss the resolution plan for Jet Airways. The Gulf-based carrier holds 24% stake in the Indian airline.
The Jet Airways board had on 14 February approved a bailout plan whereby the lenders—led by the State Bank of India (SBI)—would become the largest shareholders in the airline by converting the airline's debt into equity at a nominal price of ₹1.
The Jet Airways bailout plan was approved by the shareholders on 21 February.
"Any conditions precedent to the ₹750 crore infusion by Etihad Airways may please be taken up with the banks and settled bilaterally with them, so that the much-needed funding is made available to Jet Airways early next week," Goyal said in the letter.
If interim funding is not received at the earliest, he said, then it will be severely "deleterious" to the future of the carrier and could even result in its "grounding".