Etihad Airways and National Investment and Infrastructure Fund Ltd (NIIFL), the government-owned investor fund, are keen to invest Rs 2,000 crore each in Jet Airways, but bankers are unable to finalise an investor who will take a controlling stake to run the airline.
Banks have estimated that about Rs 5,900 crore is required to restart Jet Airways, which is now grounded for almost two months.
Minority partner Etihad Airways has asked banks for interim funding to restart operations of the airline. In a meeting on Friday, bankers led by State Bank of India (SBI), which is leading the negotiations with the investors, deliberate on getting a big investor for the airline. NIIF, which is an investor-owned fund manager, anchored by Government of India (GoI) in collaboration with leading global and domestic institutional investors, is also keen to invest about Rs 2,000 crore if interim funding is provided by the banks.
IN A LIMBO
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- Banks have estimated that about Rs 5,900 crore is required to restart Jet Airways, which is now grounded for almost two months
- In a meeting on Friday, the lenders continued to deliberate on how to get interim funding for the airline
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The airline has a total debt of Rs 15,000 crore, which the banks may write off partly and restructure the remaining debt, so that the new investors will be able to service the remaining debt while bringing in fresh investments.
"There are a number of individual investors who are keen to take over the airline. But the issue is about the interim funding of Rs 1,500 crore, which the bankers have to decide how it can be infused for the airline to restart.
Bankers are continuing to explore options for reviving the airline. "But the environment seems to be difficult. Interim funding will have to come from the banks, which is getting difficult. The investors want the banks to initiate the funding." said a banker. Bankers have a charge on just three aircraft of the company. About 13 planes of Jet are grounded at the Mumbai airport, once a busy hub for the airline.
Last week the airline told the stock exchanges that it is not in a position to consider and approve the audited financial results for the fiscal ended on March 31.
Hinduja Group's plan to acquire Jet Airways got stuck after a Dutch court declared the ailing airline bankrupt in the previous week. On the day the bankers were to meet Hindujas and the Etihad officials in Dubai, the company was declared bankrupt in Amsterdam with a liability of Rs 150 crore to be paid following a request from overseas lessors to the airline.
Initially, SBI had planned a detailed resolution plan that would have seen Jet Airways founder and former chairman Naresh Goyal stake fall to below 10%. But that plan got derailed after Supreme Court nullified the February 12 circular of Reserve Bank of India (RBI). Under the plan, a clutch of public sector banks would have had a controlling stake until an investor comes in to take over the airline.
The bankers were to take over Goyal's stake at Re 1, as per this circular. But since the circular was rejected by the court and RBI failed to come up with new guidelines to resolve stressed assets, the bankers had to explore other methods of resolution. Goyal continues to hold 51% in the airline and Etihad Airways 24%.
Naresh Goyal and his wife Anita are under investigation by Economic Offences Wing on alleged fund diversion from Jet Airways.
