The lenders, led by State Bank of India, may respond as early as June 10
It is going to be a crucial week as attempts to revive Jet Airways gather pace, with its lenders expected to respond to Etihad Airways and the Hinduja Group, as early as Monday, on the next course of action.
"June 10 is when the banks will signal whether things are moving to the next stage," said a senior industry executive.
Another executive added that the lenders have received the 'green signal' from the Prime Minister's Office to go ahead with the deal, indicating that the banks may be ready to take a haircut. "In an ideal situation, the plane should be airborne by mid- to end-July," the executive added.
While Etihad Airways and Hinduja Group wanted banks to take a deep haircut, as much as 85 percent, the lenders were reluctant to do so, instead waiting for a signal from the government.
According to sources, both Etihad Airways and the Hinduja Group want to hold a minority stake in Jet Airways. While the Abu Dhabi-based airline wanted to retain its 24 percent stake in the Indian carrier, the Hinduja Group is also looking for a little less than 25 percent shareholding.
Apart from the two, Etihad Airways may bring in Mubadala Investment Company, Abu Dhabi's sovereign wealth fund, as its strategic partner to invest in Jet Airways. The strategic partner may hold up to 20 percent in the Indian airline.
Also, the Hinduja Group is seeking assurances on several fronts. "The Group doesn't want to be dragged into any litigation related to Jet Airways' last promoter and doesn't want to be in a sticky position because of that. It also wants Jet Airways slots and traffic rights to be restored," said one of the executives cited above.
Last month, Jet Airways founder and former Chairman Naresh Goyal and his wife were prevented from flying out of India. Sources had told Moneycontrol that the Enforcement Directorate is also separately looking into Goyal’s investments in various foreign airlines.
Much of Jet Airways slots, especially in the two busiest airports of Delhi and Mumbai, have been given away to competition. Peers such as SpiceJet has also leased many aircraft that were earlier part of Jet Airways' fleet.According to the last available data in the website of industry regulator DGCA, 99 of Jet Airways planes have been de-registered. Once de-registered with the local regulator, the planes can be sold and taken out of the country. The airline had nearly 120 planes in its fleet, before the crisis began.
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