MUMBAI: Rajnish Kumar, chairman of State Bank of India, the lead lender who has been working on the bank-led resolution plan for revival of the debt-laden Jet Airways, said on Friday that it is a “work in progress” and the resolution plan will be in place “very soon, within a week”. Jet Airways, facing a severe cash crunch, has grounded over 40 per cent of its fleet and might ground moreover non-payment of dues to lessors, delayed salary payments to staff and defaults on loan repayments.
Speaking to reporters here, Kumar said that any resolution of a corporate account is a complex process that needs to take care of all stakeholders. The comment comes at a time when reports suggest that Jet’s Abu Dhabi-based partner Etihad Airways is reluctant to bring in money after Jet’s founder Naresh Goyal wrote a letter asking for Rs 750 crore in immediate funds.
Reportedly, Etihad Board members also have reservations about removing Goyal’s 22 per cent equity cap after resolution to “perpetuity”. Kumar did not comment on the specifics of the promoters’ plan and the issues Jet’s equity partner Etihad had raised over the resolution plan, but said the effort is going on and work on resolution had started in November itself.
“We are making every effort and SBI is leading it. We are clear on one thing, to ensure that the airline runs and not get grounded, and it is not to save our accounts becoming NPAs. That’s the fundamental difference between any other NPA and Jet Airways,” Kumar said.
Other public sector banks have earlier said that they are willing to work collectively on any decision to lend to Jet Airways that is looking for funds to tide over the crisis. Punjab National Bank and Bank of India both expressed willingness to lend as part of a consortium.
According to the draft resolution plan submitted to the lenders, Etihad will bring in around Rs 1,800 crore as fresh equity, Goyal will chip in Rs 750 crore and the rest of the `3,800 crore will come from other investors.
Jet’s founder and chairman Goyal and his family own 52 per cent in the airline now, which he had agreed to pare down to 22 per cent to secure a financial bailout.
Debt pile
Jet Airways has a debt of over I8,000 crore
The airline needs to make repayments of up to L1,700 crore by the end of March
The carrier has already defaulted on repayments on external commercial borrowings due to the scarcity of funds
A draft resolution plan by lenders say Etihad will pay L1,800 crore, Goyal L750 crore and the rest by other investors