Jet Airways has cancelled all its international flights up to April 18 after bankers failed to provide interim financing of Rs 1,500 crore, which they had planned to infuse as part of the resolution plan mooted by State Bank of India.
The Jet Airways Board will meet today to discuss the future course of action. SBI, the lead lender to the airline, said it will vet the bid proposals received before taking a call on further funding.
In an internal communication, Vinay Dube, chief executive, Jet Airways, said, “We have extended cancellation of international operations through Thursday, April 18,” adding that the decision was taken following the non-receipt of funds from its lenders, who have now management control of the airline following a debt-restructuring plan last month.
Jet share price on the BSE ended Rs 261.80 a piece about 0.52% higher than the previous day's close.
"We have been working with the lenders to secure interim funding for our operations. The interim funding has not been forthcoming thus far," he said. He also said the current status of engagement with the lenders and other related matters will be placed before the Board on Tuesday morning to seek guidance on the next steps.
Lenders want to see a credible bid as the new promoters would need the financial standing to address the over Rs 8,400 crore of debt that the airline has on its books.
An SBI spokesperson said in a statement said that the bid process for the orderly sale of equity in Jet Airways will be vetted by the legal team and that prospective bidders will be shortlisted by SBI CAPs shortly. “The proposed equity conversion by banks, if any, will be undertaken as a transitory mechanism to facilitate the bidding-cum-sale process,” the official said.
“Necessary support to facilitate the process is being extended by the banks in the consortium. Co-operation by and support from all the other stakeholders will be the key to the success of the process,” the SBI spokesperson said in a statement.
Only seven planes of the airline are flying on select domestic routes. Lenders, on their part, are waiting to finalise the bids before infusing any further funding. Banks have so far only infused about Rs 300 crore in the airline all through this crisis.
A senior banker said, “The process for sale is on and the bid document will be issued to eligible EoI (expression of interest) holders immediately after the legal work is done. But we need to see the seriousness of the bidders.”
The airline's long-haul international operations are serviced by the wide-body Boeing B777s and Airbus A330s while it deploys smaller B737s into the Middle East, Saarc and Southeast Asia markets. The airline has only seven planes operational now – six regional jets ATRs and one B737. The rest of the planes in its fleet of 123 are grounded due to non-payment of rentals to the lessors and lack of cash to purchase jet fuel.
Frantic employees of the airline reached out to Prime Minister Modi to intervene to save 20,000 jobs. Jet pilots, meanwhile, deferred their no-fly call and appealed to SBI to release the emergency funding.
"We would like to appeal SBI to release Rs 1,500 crore for the airline to help it to continue operations. We also appeal Prime Minister Narendra Modi to save 20,000 odd jobs at the airline," National Aviation Guild vice-president Adim Valiani told reporters at the airline's headquarters in Mumbai.
VERTICAL DROP
- 7 – Number of Jet’s operational flights
- Rs 8.4K cr – Owed by Jet Airways to various lenders
- Rs 300 cr – Infused by lenders into the ailing airline during the crisis
