Crisis-hit Jet Airways Wednesday said State Bank of India, along with other lenders and stakeholders, is working on a comprehensive resolution plan to turnaround the airline. The resolution plan being discussed contemplates equity infusion and consequent changes in the board of directors, the full-service carrier said.
Against the backdrop of its shares taking a beating amid uncertainties over possible revival plan, Jet Airways said it has been working on various cost-cutting measures, debt reduction and funding options. The full-service carrier, which has been grappling with financial woes, defaulted on loan repayment to a consortium of Indian banks led by State Bank of India (SBI) on December 31, 2018.
In a statement, the airline said a resolution plan that contemplates various options, including a proportion of equity infusion by various stakeholders and the consequent change in the company’s board, is being worked out.
“SBI, in consultation with the other members of the consortium and the other stakeholders, has been working on a comprehensive resolution plan towards a turnaround of the company for its sustained growth and restoration of financial health,” Jet Airways said.
The airline also said the resolution plan is presently under active discussion amongst the stakeholders and that the various options are yet to be crystallised and agreed to by the stakeholders in the best interests of the company.
Citing the board’s decision taken in August 2018, the airline said it has been working on various cost-cutting measures, debt reduction and funding options. Infusion of capital and monetisation of assets, including the company’s stake in its loyalty programme, in consultation with various key stakeholders are being looked at.
According to the airline, the resolution plan contemplates various options on the debt-equity mix, proportion of equity infusion by the various stakeholders and the consequent change in the composition of the board of directors. The implementation of the resolution plan, once approved by all the stakeholders, would be subject to receipt of applicable statutory, regulatory, contractual and corporate approvals and consents.
Shares of Jet Airways plunged nearly 8 per cent to Rs 271 on the BSE.
According to reports, Jet Airways’ strategic partner Etihad Airways is looking to hike its stake in the airline. Responding to queries about the reports, an Etihad spokesperson told PTI, “Etihad does not comment on rumour or speculation”. Earlier in the day, the Civil Aviation Ministry Wednesday expressed hope that the airline, its strategic partner Etihad and lenders reach a “common plan” to deal with the situation.