The State Bank of India (SBI) on Thursday said that lenders are considering a resolution plan for the debt-laden Jet Airways to ensure long-term viability of the company. SBI had on Wednesday said that discussions with stakeholders were “progressing well” on a comprehensive resolution plan that also contemplates equity infusion and consequent changes in its board of directors. There are rising concerns over financial health of Jet Airways, whose shares have also taken a beating at stock exchanges.
“We would like to state that lenders are considering a restructuring plan under the RBI framework for the resolution of stressed assets that would ensure long-term viability of the company," SBI said in a statement. It said the restructuring plan for the cash-strapped airline would need approval from boards of lenders.
"Any such plan would be subject to the approval of boards of the lenders and subject to adherence and clearance, if required, from the RBI and/or Sebi (takeover code, ICDR regulations.) and Ministry of Civil Aviation and in compliance with all regulatory prescriptions," the statement said.
Shares of the airline are trading 4.24 per cent lower at Rs 259.50 apiece on BSE.
The Naresh Goyal-founded airlines is in a severe cash crunch and also owed money to vendors and lessors. It has also not been able to pay salaries to its pilots, senior executives resulting in the cancellation of flights. To reign in the crunch, Jet has cancelled flights on non-profitable routes and has also decided to do away with complimentary meals for economy class passengers travelling on domestic routes under two more fare categories. Following three consecutive quarterly losses, the full-service carrier has simplified its sub-fleet, reduced sales, distribution and maintenance cost.
Though India is one of the world’s fastest-growing airlines markets, Jet Airways has constantly faced the brunt of the falling rupee, rising jet fuel prices, intense price wars by low-cost carriers.
(With PTI inputs)