On the emergency funding to the loss-making carrier, the BOI chief said lenders had made it clear that all stakeholders should pitch in. Two senior executives of the other two public sector banks said time was running out. The situation is looking grim as more and more Boeing 737 MAX
8s are being grounded. The resolution plan has to be put to work this month itself.
Jet has a debt of over Rs 8,000 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. The airline has, however, already defaulted on repayments on external commercial borrowings due to paucity of funds. The acute liquidity crunch has forced it to ground aircraft, shut down stations, and delay salary payments to its pilots and engineers along with other senior staff. It has been looking at various ways to raise funds.
Last month, shareholders of Jet Airways
approved conversion of loans into shares and other proposals. On February 14, the Jet board approved a bank-led provisional resolution plan, whereby lenders would become the largest shareholders in the airline.
Following approval from shareholders, a part of the debt would be converted into 114 million shares at a price of Rs 1 apiece, according to the Reserve Bank of India norms.