900 Million Turnaround for Jet Airways

Domestic lenders led by State Bank of India (SBI) have proposed a $900-million resolution plan, comprising fresh equity infusion and restructuring of $450 million of its loans, according to a report by Mint. The consortium of banks on January 8 met Jet Airways’ officials, including founder and Chairman Naresh Goyal and a representative of Etihad Airways, which holds a 24 percent stake in the airline, to discuss its financial state.

The resolution plan was shared with Jet Airways’ lessors and vendors at a meeting chaired by SBI and attended by the airline’s senior management, including Goyal and a representative of Etihad Airways PJSC, which holds a 24% stake, the people cited above said on condition of anonymity.

“While the finer details are still being worked upon, the broader contours entail that Goyal and Etihad will together infuse $450 million in the company, while the Indian lenders will restructure another $450 million of the airline’s debt, which is up for maturity between now and March,” a source told.

“The final plan will be put in place by the end of January and the lenders are hopeful that the resolution plan will be in force by 31 March this year, which is well before the 180-day period under the Reserve Bank of India’s (RBI’s) 12 February circular,” said the first person cited earlier.

Jet Airways, which has been facing financial turbulence for a while, has been in talks with potential investors to raise fresh equity. The various fundraising options it has explored include a stake sale in its loyalty programme, Jet Privilege Pvt. Ltd, and a stake sale in the airline to the Tata group. While the stake sale in the loyalty programme drew interest from several private equity funds, including TPG Capital and Blackstone Group, discussions with the Tata Group ended over Goyal’s future role at the airline.

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