Jet Airways delays ECB repayment amid 'temporary' liquidity crunch

Crisis-hit Jet Airways, where lenders are set to take control under a debt resolution plan, Thursday said it has delayed repayment of overseas borrowing due to "temporary liquidity constraints". This is at least the fourth time that the airline has defaulted on debt repayment in recent months. After weeks of speculations and uncertainties over the future course of Jet Airways, which has grounded over 80 planes due to financial woes, the airline's board Monday approved a resolution plan formulated by SBI-led domestic lenders.

"... the the repayment of the External Commercial Borrowing (ECB), availed by the company for working capital purposes, falling due on March 28, 2019, has been delayed owing to temporary liquidity constraints," the airline said in a filing to the BSE.

The company has engaged with the lender in relation to the same, it added.

As part of the resolution plan, on Monday, Naresh Goyal quit as chairman of the embattled airline and the board also approved lenders taking control as well as immediate fund infusion of Rs 1,500 crore.

Struggling to stay afloat amid a debt burden of over Rs 8,000 crore, the board of the country's first private full-service carrier also approved the conversion of banks' debt into equity and induction of nominee directors of the lenders, who would become majority stakeholders.

In an emotionally-charged letter to the 22,000-strong employees, Naresh Goyal also said the approval of the debt-recast plan will put the carrier on a "sounder and sustainable" financial footing.

Here’s the full letter:

“My dear Colleagues,

For the past 25 years, Jet Airways has been a way of life for Anita and me. Very few people are fortunate enough to live their dreams and we have been truly blessed to be one among those few.

My dream started out as the simple yearning of a simple man, a desire to bring the joy of flying to every Indian. Two and a half decades later, what we have built together, far exceeds anything I dared to imagine back then.

I have watched with pride as our airline has grown from a fleet of just 4 aircraft flying to 12 destinations in our first year, to a peak fleet of 124 aircraft connecting our guests to over 550 destinations worldwide. We connected the length and breadth of India at a time when flying was still considered a luxury in our country, growing to become India’s premiere full-service airline and a true flag-bearer of warm Indian hospitality around the world.

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This has all been possible because of the tireless, unrelenting efforts of each and every one of you, tight-knit members of our Jet Airways family, setting guest-service benchmarks to the envy of our competitors, helping us collectively realise our dream of our Jet Airways emerging as a global gold standard of warm Indian hospitality. It has truly been a labour of love that Anita and I, together with all of you have built collectively with our blood, toil and tears. Looking back I would not want to change a thing. Not the triumphs, nor the trials and tribulations, challenges nor sweat equity.

But, today, as I ponder on the past and look to the future, I do realise that there must come a day when the torch that we have carried all this while, will need to be passed on. Today, I would like to take a moment to appreciate and acknowledge the beautiful people in my life: the ones I have laughed with and cried with, the ones I have shared my deepest thoughts with, as well as the ones that have recently appeared full of kindness and compassion, and I know, without a doubt that I have been blessed beyond words. I would also like to take this moment, to acknowledge the contribution of my wife, confidant and partner Anita without whom this journey would just not have been possible.

And now I would like to humbly and with immense love and gratitude, inform you that both Anita and myself are stepping down from the Board of Directors of Jet Airways with immediate effect. Our airline stands poised to turn the page, ready to fly out from the turbulence of recent months and soar forth into a bright new future.  Our shareholders have approved the Bank-led Resolution Plan (BLRP), which marks a definitive step in our efforts to guide Jet Airways onto a sounder and sustainable financial footing. There is light at the end of the tunnel and that is why I feel the time is now right for us to hand over the reins of our beloved airline to a new generation of leaders that I am certain will take Jet Airways to even greater heights.

I would be lying, if I said this was not an emotional moment for us. Jet Airways, its employees both past and present, shareholders, partners, regulators, and most importantly our dear guests, are our family and there is no sacrifice both Anita and I would not make to ensure the best interests of our Jet Airways family are safely secured.  We have not come to this decision lightly but this is not the end of the journey, rather it is the start of a brand new chapter.  I am stepping down as the Chairman of the Board, but both Anita and I remain committed to seeing Jet Airways embark on a dynamic new chapter.

In a different capacity, we shall remain just as devoted to cementing Jet Airways’ place as the gold standard of service excellence in Indian skies. And we look forward to sharing the next chapter in our airline’s journey with you as it soars ahead into a new dawn, filled with hope for a future of growth, prosperity and success.

Lastly, both Anita and I would simply like to thank you all for the dedication, commitment and service over the past twenty-five years.

Most sincerely,

Naresh Goyal”