Moneycontrol News
Debt-laden Jet Airways defaulted on a loan secured from a consortium of banks led by the State Bank of India this week, drastically altering the bargaining power of its promoter, Naresh Goyal, in takeover talks.
The banks will be forced to initiate debt resolution proceedings against the airline if it does not repay Rs 1,700 crore by March 2019. This leaves Goyal with very few options, given the liquidity crunch that Jet is faced with. Talks of a takeover by Tata Sons have stalled over the prickly issue of Goyal's continuance on the board of the airline.
The drop in fuel prices could provide some respite to the aviation sector, and Jet Airways, in particular. However, for an airline that loses around Rs 14 crore a day, Jet faces an uphill task to raise capital and skirt insolvency proceedings.
Towards the latter half of 2018, Indian carriers hit an air pocket on the back of high jet fuel prices and a weak rupee. However, the weather seems to be changing for the better, with a relatively favourable exchange rate and easing crude oil prices. But with Naresh Goyal in the cockpit, this may not be enough to revive Jet's flagging financials.
Uttaresh Venkateshwaran is in conversation with Prince Thomas, Corporate Bureau Chief, Moneycontrol, to discuss how Jet Airways could secure a soft loan to tide over this crisis.
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