The long-drawn crisis at cash-strapped Jet Airways might be coming to an end as lenders to the carrier, led by the State Bank of India, are expected to meet on January 16 and discuss a resolution plan.
To bail out the Naresh Goyal-founded airline, the lenders' plan reportedly includes selling more stake to Etihad Airways and cutting Goyal's stake from 51 percent to nearly 22 percent. Also up for discussion will be inducting the founder's son, Vihaan Goyal to the board. Etihad Airways holds a 24 percent stake in the airline.
The banks are trying to come up with a resolution plan for the airline before March, which has a debt worth Rs 8,000 crore as loans and defaulted on repayment dues.
Lenders will be able to issue fresh loans to the carrier if a resolution process starts. Jet Airways had asked lenders for Rs 1,500 crore in working capital in December 2018, when the top management of both parties had met, to pay employee salaries. The attempt was unsuccessful as banks were reluctant to extend fresh funds to Jet Airways before the website had a definite restructuring plan.
Jet Airways had informed the stock exchanges on January 2 that it couldn't repay interest and principal instalments due on December 31. This triggered an emergency meeting from the lenders to come up with a plan. SBI had also asked for a forensic audit of the company by EY, which did not find any foul play in Jet Airways' books. Therefore, the lenders decided to proceed with a restructuring process.
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