The proposal for releasing priority funding of Rs 1,500 crore is likely to be put to vote on Friday following which a final decision will be taken. People in the know indicated that there’s a likelihood of the vote not going through. Banks have made it clear that that they will pursue other options, including a reference to the insolvency court, if the stake sale process fails to result in “an acceptable outcome.”
In a joint statement late Thursday evening, lenders said they intended to pursue the bank-led resolution plan for the stake sale in the company in a time-bound manner under the present legal and regulatory framework, while inviting expression of interest from potential bidders.
"Lenders are cognizant that the outcome of the efforts will depend on the interest shown by the parties in stake sale," the statement added in a sign of things to come.
A senior public sector bank executive associated with the Jet Airways
rescue plan said lenders were trying to give support but the financial situation was grim. "It is already operating with a small fleet. We had prepared an estimate of Rs 1,500 crore for interim funding. It was a preliminary figure and that keeps increasing. Unless there is a concrete investment proposal, it will be a difficult situation."
Another banker pointed out that not all lenders are willing to release more funds into the company, not even priority funding. ‘’The resolution plan involved funding from the original promoters, and in the absence of that there should be a commitment from a new investor for further funds to be released,” said a bank executive.
In an indication that the crisis is getting bigger, Jet Airways
CEO Vinay Dube and CFO Amit Agarwal briefed civil aviation secretary Pradeep Singh Kharola on the current state of operations. State Bank of India chairman Rajnish Kumar too briefed the secretary. “Jet Airways
has assured that its fleet size will not go down below 26 planes. Safety and convenience of passengers will be kept in mind before any decision on Jet Airways is taken,” Kharola said.
Lessors have been grounding Jet's fleet over non-payment of dues. Other suppliers and vendors too are stepping up pressure. On Thursday, oil marketing companies
briefly stopped fuel supply to the airline over non-payment. However, operations resumed soon after. "Jet Airways continues to operate as per schedule," the airline said in a statement.
(Additional reporting by Abhijit Lele)