The debt-ridden carrier has been struggling with profitability recently, having recently accumulated loans close to Rs 8,000 crore
Mumbai: Jet Airways' lenders will restructure the loans given to the debt-laden Indian carrier under the 'Sashakt' scheme, State Bank of India (SBI) Chairman Rajnish Kumar, speaking at a conference call after the third quarter earnings results, said. Kumar added that the debt recast proposal would be sent to the Indian Banks' Association's (IBA) screening panel. Jet Airways has been struggling with profitability recently, having recently accumulated loans close to Rs 8,000 crore.
Through a market-led approach, the Sashakt scheme aims at resolving the issues of non-performing assets.
Etihad, banks' rescue plan for Jet
Jet Airways partner Etihad Airways and a consortium of banks said to be stitching up a rescue plan to help keep the country's biggest full-service airline running. SBI is set to transform some of its loans into a stake of 15 percent at least in Jet Airways Ltd to give the carrier some much-needed respite.
The banks could convert some of Jet Airways' loans converted into equity. The airline, in a stock exchange filing on January 28, announced that an Extraordinary General Meeting (EGM) of the company will take place on February 21.
Jet seeks conversion of loan into shares
At this month's EGM, Jet said that a special resolution would be put forward to consider and "approve the conversion of loan into shares or convertible instruments or other securities". Jet Airways scrip closed 7.79 percent up at Rs 255.90 per share on Friday after attaining an intra-day high of Rs 281.50 and a low of Rs 234.30 from its last close of 237.40.
Strong competition in the aviation sector, coupled with higher oil prices have resulted in Jet's financial woes worsening by a rising debt-pile.