Lenders and key stakeholders discussing a debt resolution plan for Jet Airways seem to have reached a broad consensus. Rajnish Kumar, chairman, State Bank of India , on Monday said: “Outline is ready but implementation depends on government and regulatory approvals.” Kumar was speaking to a television channel.
The airline has called for an EGM on February 21 and also sought an increase in the authorised share capital from Rs 200 crore to Rs 2,200 crore. Key stake holders and the consortium of Indian banks with exposure to Jet Airways met early in January to discuss the debt resolution plan. Jet’s consolidated debt as on March 2018 is Rs 9,425crore and the airline needs massive infusion of equity to save it from being grounded.
The airline will be the first case under project Sashakt, a five-pronged strategy proposed last year by a clutch of Indian bankers to resolve bad loans, Kumar had said earlier on Friday in a media interaction post the banks quarterly results.
There were reports in the media that suggested that post this debt resolution and equity-debt swap, SBI will hold 15% in Jet. The chairman , however, refused to put a number in Friday’s interaction, saying that Jet is “still work-in-progress and it will be premature to share the details, as of now.”
The ongoing debt resolution will be within RBI’s February 12, 2018 resolution framework but it will also require approvals from market regulator Sebi as well as the government, primarily the ministry of civil aviation, over the issue of control of the foreigner running the Indian entity.
Sources had earlier indicated to FE that Etihad has sought a control dispensation from the ministry, making it a contentious issue that needs to be resolved and also a challenge for new stake holders.
Jet Airways in a stock exchange filing, after it had to ground four of its aircraft due to lease payment delays last week, had stated that airline’s key stakeholders are actively engaged towards finalisation of a debt resolution plan and Jet Airways is confident of successfully resolving the current challenging situation. On December 31 it defaulted on payment of interest and principle to the lenders.