‘Lenders Discussing Ways To Revive Jet Airways; Fund Infusion Likely Soon’

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NEW DELHI — Lenders to Jet Airways are discussing ways to revive the crisis-hit carrier and fresh funds are likely to be infused shortly, officials said on Tuesday.

Amid acute financial crunch crippling its operations, Jet Airways management is awaiting clarity on receiving fresh funds after which a decision would be taken on continuing operations.

“Discussions for reviving the airline are underway and nothing has been finalised as of now,” Punjab National Bank Managing Director and CEO Sunil Mehta told reporters here. 

Representatives of various lenders to Jet Airways are also understood to have discussed issues related to Jet Airways with Financial Services Secretary Rajiv Kumar. 

Jet Airways has a debt burden of more than Rs 8,000 crore. 

SBI Capital Markets has the mandate for Jet Airways sale on behalf of the SBI-led consortium of the domestic lenders to the debt-ridden private carrier. 

A senior government official said that funding for Jet Airways from lenders is likely to come through. 

The board of the full service carrier, which is currently operating less than 10 aircraft, is meeting in Mumbai on Tuesday. 

On Monday, lenders did not take a final decision on providing emergency funds to the cash-strapped carrier. 

Another government official said that approaching the National Company Law Tribunal (NCLT) for Jet Airways is not an option at this stage. 

“Right now, the lenders are trying to resolve the issue by seeking bidders for investment. This is not the time for lenders to approach NCLT for resolution,” the official said. 

Creditors can take a defaulting company to the NCLT for seeking approval for resolution under the Insolvency and Bankruptcy Code (IBC). 

Earlier in the day, sources said Jet Airways founder Naresh Goyal has decided not to bid for acquiring stake in the cash-strapped airline. 

Pursuant to a debt resolution plan approved by the airline’s board last month, SBI Capital Markets, on April 8, invited Expression of Interest (EoI) from potential investors to buy out 75 per cent stake in the airline. 

Prabhu calls for review of issues related to Jet Airways

Civil Aviation Minister Suresh Prabhu has called for a review of issues related to struggling Jet Airways, including rising fares and flight cancellations.

Prabhu has also asked Civil Aviation Secretary Pradeep Singh Kharola to take necessary steps to protect the rights and safety of passengers.

Jet Airways is grappling with acute financial crunch and is operating less than 10 planes besides temporarily suspending international operations.

“Directed Secretary @MoCA_GoI to review issues related to Jet Airways, especially increasing fares, flight cancellations etc,” Prabhu said in a tweet on Tuesday.

Besides asking the secretary to take necessary steps to protect passenger rights and safety, Prabhu has called for working with all stakeholders for their well being.

This is the second time in less than a week that Prabhu has publicly said he has called for a review of issues related to Jet Airways.

On Monday, lenders did not take a final decision on providing emergency funds to the cash-strapped carrier.

The airline’s board is meeting in Mumbai on Tuesday.

In afternoon trade, shares of the airline declined 3.59 per cent to Rs 252.40 apiece on the BSE.

Jet Airways is operating around seven planes, including six turbo propelled ones used for shorter hauls. It had 123 aircraft in operation in December.

“As you are aware, we have been working with the lenders to secure interim funding for our operations. The interim funding has not been forthcoming thus far, and as a result we have extended cancellation of international operations until April 18,” the airline’s CEO Vinay Dube said in an internal communication on Monday.

On March 25, the airline’s board approved the debt resolution plan, under which SBI-led consortium would provide an emergency loan of Rs 1,500 crore and also take control of the carrier.
 


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