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Jet Airways to seek interim funding from lenders on Monday

Jet Airways' liquidity crisis could not have come at a worse time, what with the government busy with elections and the model code of conduct in place. (PTI)Premium
Jet Airways' liquidity crisis could not have come at a worse time, what with the government busy with elections and the model code of conduct in place. (PTI)

  • Civil aviation secretary says Jet Airways had a meeting with bankers on Friday where they put forth their funding requirements
  • Jet Airways was supposed to get 1,500 crore as interim funding as part of a bailout plan but lenders are releasing small amounts

Mumbai: Jet Airways (India) Ltd, struggling to stay afloat and avoid being taken to the bankruptcy court, will on Monday meet with lenders—led by the State Bank of India (SBI)—with a fresh demand for interim funding.

The airline has suspended its international operations till Monday afternoon.

SBI Capital Markets Ltd, which is managing a Jet Airways stake sale, got expressions of interest (EoI) from about five investors until about an hour before the end of a four-day window that ended on Friday.

These investors, including Jet Airways shareholder Etihad Airways PJSC, National Investment and Infrastructure Fund (NIIF) and a couple of private equity funds, will now be asked to put in financial bids, a person privy to the development said before Friday’s deadline drew to a close.

An update on the Jet Airways stake sale process was awaited from SBI Caps at the time of publishing this story.

Civil aviation secretary Pradeep Singh Kharola said in Delhi that Jet Airways executives had a meeting with bankers on Friday where they put forth their funding requirements.

“Discussions on interim funding are on. They have been asked to rework their requirement. They will again approach their banks on Monday. The future course of action will be decided depending on what the banks decide," said Kharola.

The secretary said that Jet Airways was operating only 11 flights as of Friday, and the number could come down further.

However, a person familiar with the operations of the airline said that the company owns 16 aircraft that it has no reason to take them off from service.

Jet Airways' liquidity crisis could not have come at a worse time—the government is busy with Lok Sabha elections and officials are cautious about taking decisions in an environment of political uncertainty.

Kharola had a meeting with Nripendra Misra, principal secretary to the prime minister, on Friday but officials did not confirm if it had anything to do with Jet Airways. The government is keen to salvage the airline and prevent it from collapsing, but does not want to give ammunition to the opposition over any allegations that it went out of its way to support a private company.

Jet Airways had informed stock exchanges last month of a lender-led resolution plan under which it was to get 1,500 crore in emergency funding. However, lenders have been releasing funds only in small amounts and the airline has found this insufficient for running its operations.

“Sadly, while the airline was supposed to get a cash infusion of 1,500 crore, nothing has happened till now," said Kiran Pawaskar, a Nationalist Congress Party legislator, and a senior member of All India Jet Airways Officers and Staff Association.

Pawaskar pointed out that airline staff are not getting paid and said that lenders should at least try to keep the airline afloat till the bidding process is completed.

Mint had on 11 April reported that private equity (PE) firms TPG Capital and Indigo Partners, NIIF, and Etihad Airways have submitted their expressions of interest.

“We will soon take legal recourse and also file FIRs against the management for salary delays," Pawaskar said.

Pilots of Jet Airways have also threatened to take legal action against the management of the cash-strapped airline if salaries pending for the last three months are not paid by 14 April. Aviation minister Suresh Prabhu tweeted on Friday that his ministry would “review issues related to Jet" and “take steps to minimise passenger inconvenience and ensure their safety".

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