Mumbai: Financially-challenged Jet Airways’ Board meeting here Tuesday ended inconclusively as the airline awaits the lenders’ decision on its plea for interim funds to stay aloft, sources said.
A day before, the financially-struggling airline presented a plan for interim funding to its lenders. “The Board meet was inconclusive. We are awaiting the lenders’ reply. It is of paramount importance that we receive clarity on interim funding,” an airline source said.
The development assumes significance as the airline has almost run out of funds to pay for fuel and other operational expenses. Industry insiders say that without extra funds, the airline might have to temporarily suspend operations.
It has folded up most operations due to grounding of over 80 per cent of its fleet by lessors, and is running just 7 aircraft, barely enough to save its air operating permit.
Awaiting the outcome of lenders’ meet with the government, the cash-strapped airline has extended cancellation of international flights till April 18 (Thursday) after last week suspending them till April 15 (Monday).
Vinay Dube, the CEO of the airline, wrote to staff that the management would seek guidance from the board on the next steps. In his message, he said the airline has been working with lenders to secure interim funding for its operations. “The interim funding has not been forthcoming thus far, as a result of which we have extended cancellation of international operations through Thursday, April 19,” he wrote. “We will keep you updated on all critical developments,” he added.
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Late on Monday, the State Bank of India (SBI), which leads the consortium of Jet’s lenders, said merchant banker SBI Caps’ legal team was working on the expressions of interest (EoIs) received from investors, and bidders will be selected soon.
“The proposed equity conversion by banks, if any, will be undertaken as a transitory mechanism to facilitate the bidding-cum-sale process,” the SBI said in a statement.
SBI Caps is acting on behalf of the group of lenders as part of the bank-led resolution process. Necessary support to facilitate the process is being extended by other banks in the consortium. “Cooperation and support from all other stakeholders will be the key to success of the process,” the SBI said.
Even the Directorate General of Civil Aviation (DGCA) has started giving the airline’s slots to other carriers, suggesting Jet’s closure was just a matter of time. Jet’s woes intensified as the airline that once operated around 120 aircraft is now left with a 16-plane fleet.
It owes over Rs8,000 crore to the SBI-led consortium of lenders. Its only ray of hope is an immediate injection of interim funding and the completion of the stake sale process, initiated by lenders.
—ians
