Mumbai: Jet Airways founder Naresh Goyal has said that he is ready to pledge the rest of his shares to the beleaguered airline’s lenders only on the condition that they will release the promised funding of Rs 1,500 crores without any further delay, sources aware of the development said. Lenders, however, are yet to respond to the proposal. At present, Goyal owns 51 percent shares in the airline and has pledged 31.2 percent out of those with the lenders.
Goyal’s remaining shares are critical to the banks’ plan to sell a controlling stake in the airline in order to raise funds. Jet, which has grounded most of its planes, defaulted on vendor payments and delayed salaries, is in immediate need of funding. According to the management, the ailing airline will not survive beyond this month if funds are not released urgently.
Uncertainty looms large over the resolution plan
The plan by Jet’s lenders to sell a controlling stake in the airline was clouded by uncertainty after the Supreme Court struck down the Reserve Bank of India’s February 12 circular. Now, banks can only sell the shares that have been pledged to them. According to the bid document, the sale is being conducted by the lenders as Jet failed to honour its debt obligations.
What does the resolution plan involve?
Under the resolution plan, 114 million shares would be issued to Jet’s lenders under a debt-equity swap at Re 1, effectively putting the lenders in the cockpit with more than 50 percent in the airline. Then the lenders would seek a new buyer or buyers for the airline.
In the backdrop
Even as Jet’s lenders look for buyers, it has been reaching out to Etihad Airways to persuade the airline to invest further in Jet. A source aware of the developments said that Etihad is planning to hold a board meeting where the revival plan proposed by the consortium of lenders will be up for discussion. The meeting is being held to decide if Etihad should invest further in Jet or not.