Jet Airways chairman Naresh Goyal to meet vendors today

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Published: January 8, 2019 4:08:56 AM

Cash-strapped Jet Airways, which has defaulted on loan repayment to banks due on December 31, will be meeting its vendors and creditors including lessors, MRO partners, among others, on Tuesday in Mumbai to impress upon them to take a haircut as the airline is unable to meet its payment obligations.

Jet Airways chairman Naresh Goyal to meet vendors today

Cash-strapped Jet Airways, which has defaulted on loan repayment to banks due on December 31, will be meeting its vendors and creditors including lessors, MRO partners, among others, on Tuesday in Mumbai to impress upon them to take a haircut as the airline is unable to meet its payment obligations.

Sources in the know of the developments told FE that promoter-chairman Naresh Goyal will be holding the meeting where he will try and convince the vendors and creditors to stand by the airline as he is negotiating with banks and strategic partners for funds.

As is known, the loss-making carrier is in discussions with the State Bank of India (SBI) for raising Rs 1,500 crore short-term loan to meet its working capital requirements and payment obligations. Jet’s JV partner Etihad, which holds 24% stake, is likely to provide guarantee for the loan apart from offering SBI the lien on its flying miles programme, JetPrivilege. SBI is the lead lender in over Rs 8,000 crore of Jet’s debt.

The talks for loan are going on at a time EY is carrying out a forensic audit on Jet on the orders of SBI for alleged irregularities. Jet has initiated talks with Tata Group to buy stake, and reportedly held discussions with partner Etihad Airways to bring in fresh capital to tide over the financial crisis, but nothing concrete has materialised so far. Sources said that talks are stuck as potential buyers are insisting on Goyal’s exit from the airline, which he is not amenable to so far.

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The success of Tuesday’s meeting with vendors depends, to a large extent, on whether Goyal will be able to convince them on these issues. Jet has already been delaying its employee salary payments and lease rental payments to the aircraft lessors.

The company had a gross debt of Rs 8,411 crore at the end of September quarter. It has large repayments of Rs 1,700 crore due over December 2018 to March 2019, Rs 2,445.5 crore in FY20 and Rs 2,167.9 crore in FY21.

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