16 April 2019: Funding for debt-laden Jet Airways is likely to come through, said a government official on Tuesday amid reports that the airline is likely to shut down temporarily.
Jet lenders, led by State Bank of India (SBI), met financial services secretary Rajeev Kumar as the airline’s share price fell by as much as 19%, Live Mint website reported.
Business channel CNBC TV18, citing unnamed sources, said Jet’s CEO has been authorised by directors at a board meeting to engage with its lenders one last time, and halt operations late Tuesday, if no funds arrive.
Separately, ET Now reported Jet’s management has proposed to suspend all operations as one option at Tuesday’s board meeting, or alternately continue with skeletal operations with any interim funds infused by SBI.
Jet Airways did not immediately respond to a Reuters request for comment.
Its banks tried to calm investors and hint at a rescue of the airline that is saddled with roughly $1.2 billion in debt.
“Lenders are committed to a revival plan for Jet Airways,” Punjab National Bank’s Managing Director Sunil Mehta told media on Tuesday.
“SBI is working on the emergency funding, everything is under discussion, nothing is finalised.” Mehta’s comments come after Jet informed all employees in a letter on Monday it was extending a suspension of international flights until Thursday due to a lack of funds.
Separately, a government official told media the funding for the airline was likely to come through and that the banks were not looking to take the airline to bankruptcy court.
The airline, which over and above its bank borrowings owes money to its lessors, staff and others, has been struggling for weeks after failing to receive a stop-gap loan of about $217 million from its lenders as part of a rescue deal agreed in late March.
In a bid to rescue the 25-year old carrier, Jet’s lenders are attempting to bring in a new investor to buy a stake of up to 75 percent in the airline and initial expressions of interest were submitted last week.