MUMBAI: Even as Jet Airways shareholders voted for the resolutions to increase equity capital of the company and conversion of debt into equity, there was only the promise of fresh equity infusion and no specific plans laid out.
In the absence of chairman and promoter Naresh Goyal, the Extraordinary General Meeting was chaired by Gaurang Shetty, whole-time director.
Amit Agarwal, CFO & Deputy CEO, said that the company had already chalked out plans for cutting costs and the move to increase equity capital now comes from the Board’s understanding for a significant capital infusion. “Talking to various potential investors. When the investor discussion gets closed, then only we can announce (names of investors) … We will as a company have a sustainable future,” is all Agarwal would say.
Arvind Gupta, founder trustee of Indian Investors’ Protection Council and a whistle blower, questioned how the State Bank of India was taking a lead role in the bank-led resolution process when the forensic audit ordered on the company is yet to be completed. “Where is the blue print (for the resolution)? Who is going to run the company? Would it be an Indian company or owned by Dubai or UAE based entities?” he asked.
Jet Airways resolution plan under the February 12 circular of RBI would also be the first-of-its-kind under Shashakt plan and currently the 11.40 crore shares being issued to the bank at an aggregate value of Rs 1 means only Rs 1 of debt goes down, Agarwal said. Experts say that only after the resolution plan is complete, the contours of the amount of debt the banks would write off or convert into quasi equity will be known. Some estimate the debt to be written off to be around Rs 4,000 crore and fresh equity infusion to be around Rs 3,000 crore for the company to be operationally viable.
Sale of aircraft planned under “sale and lease back” would give the company not just enough money to repay aircraft-related debt of Rs 1,700 crore, but also some equity, Agarwal said. Apart from that, there would be fresh equity being brought in by the shareholders, he said. On who would be running the company once the banks become majority shareholders he said, “It would be board run company once the banks become the majority owners”.