A consortium of banks, along with the National Investment and Infrastructure Fund (NIIF) and Etihad, will infuse about Rs 3,400 crore in Jet Airways. The infusion will be made in phases following which the consortium of banks, led by SBI, will own 32% stake in Jet and Abu Dhabi-owned Etihad and the NIIF will hold about 24.9% and 19.5%, respectively. The management of the company will also be restructured with Naresh Goyal left out of the board and management control. Goyal’s stake will drop to 20% from 51%. He will, however, retain his status as promoter.
Jet Airways plans to raise about $840 million from a government fund and a rights issue, Business Television India said, a day after the company's board approved a debt resolution plan that will make its lenders its largest shareholders and fix a near Rs 8,500 crore funding gap. India's National Investment and Infrastructure Fund will funnel Rs 1,500 crore ($210 million) into the debt-laden carrier for a 20% stake and Jet may propose to raise Rs 4,500 crore ($630 million) via a rights issue priced at 125-150 rupees per share.
Jet Airways shares rallied 7.5% on Friday morning after the board approved a bank-led provisional resolution plan. The bank led provisional resolution plan proposes debt restructuring to meet a funding gap of nearly Rs 8,500 crore. The plan proposes an appropriate mix of equity infusion, debt restructuring, sale/ sale and lease back/ refinancing of aircraft, among other things," the airline company said in its filing. Currently promoter Naresh Goyal holds 51% equity stake in Jet Airways.
Jet Airways’ board on Thursday approved Rs 8,500 crore debt resolution plan that mainly includes infusion of funds, debt restructuring and sale or leaseback of aircrafts. Jet will seek approval from its shareholders at a meeting on February 21 to convert its debt into 11.40 crore equity shares, making SBI-led lenders the largest shareholders of the company. The plan also empowers the lenders to appoint nominees to the airline's board. Meanwhile, Jet Airways today posted a loss of Rs 587.77 crore for the quarter ended December against profit of Rs 165.25 crore in the corresponding period last year.
Consortium of banks led by SBI plan to lend an additional Rs 600 crore to the cash-strapped Jet Airways against shares pledged by founder chairman Naresh Goyal and partner Etihad Airways PJSC and backed by their guarantees. The disclosure is likely to be made after Jet Airways’ extraordinary shareholder meeting scheduled for February 21. The fund infusion would come as a lifeline for Jet Airways, Asia’s worst-performing airline stock, which has defaulted on interest payments, delayed salaries and payment to aircraft lessor. Jet’s share price has tanked more than 73% in the past 1 year.
Lessors are planning to take back their leased aircrafts to the cash-strapped Jet Airways if the airline’s board meeting on February 14 fails to outline a firm recapitalisation plan. MC Aviation Partners, an aircraft-leasing subsidiary of MitsubishiCorp, which has leased five Boeing 737-800 aircraft, has not received leasing charges since October last year. Last week, Jet’s four aircrafts were grounded due to the non-payment of outstanding dues to lessors. Jet has a total debt of over Rs 8,000 crore at the end of September 2018. Jet’s lease dues have far exceeded the amount secured by way of letter of credits.
Whistleblower activist Arvind Gupta who blew the lid off the ICICI Bank’s alleged quid pro quo loans to the Videocon Group under former CEO Chanda Kochhar, has now raised questions over SBI’s efforts to bail out cash-strapped Jet Airways. According to him, the "questionable" MoU signed between SBI and the Naresh Goyal-owned airline to effect a debt to equity swap is a "self-defeating exercise" that will rob SBI stakeholders of their hard-earned savings. According to reports, SBI may end up with a 15% stake if the deb-equity swap is approved at the debt-laden airline’s shareholder meet.
Cash-strapped Jet Airways Ltd said on Thursday that it has grounded four aircraft due to non-payments to lessors. The airline, India's second-largest by market share, did not name the leasing firms involved. Reeling under a huge debt pile of about $1.14 billion, Jet Airways has been badly hit by fierce competition, rupee depreciation and high fuel prices. The full-service airline, which controls a sixth of India's booming aviation market, owes money to banks, vendors and lessors. Jet Airways last week said it would seek shareholder approval at a February 21 meeting to convert existing debt into equity.
Jet Airways announced a revised fee structure for changes or cancellations made on tickets from Thursday, February 7. According to the new framework, an economy passenger would have to pay between Rs 2,000 and Rs 3,800 for cancellations made seven days prior to flight departure, while cancellations within seven days would cost between Rs 2,800 and Rs 4,600. In case of a change in date, flight etc. prior to seven days of flight departure, the charges would be between Rs 1,500 and Rs 3,500, while similar changes within seven days would cost between Rs 2,300 and Rs 4,300.
Etihad Airways has pre-purchased Jet Airways’ tickets worth $35 million (Rs 252 crore) through its loyalty programme company Jet Privilege, infusing some funds into the cash-strapped airline, sources said. The tickets will be offered to Jet Privilege members as redemption for their accumulated miles of air travel. Etihad owns 50.1% of Jet Privilege, while the rest is held by Jet Airways. The Abu Dhabi airline owns 24% stake in Jet Airways. Etihad’s latest infusion is unlikely to help the airline much, which is staring at a Rs 1,700 crore loan repayment by March 2019.
Jet Airways’ shares soared over 13% on Friday morning on reports that the airline has accepted an offer from Etihad. Promoter Naresh Goyal will reportedly step down, CNBC-TV18 reported, quoting agencies. The airline is believed to have agreed with most of the conditions set by Etihad Airways. The stock touched an intraday high of Rs 281.50 and an intraday low of Rs 234.30.
Jet Airways has been forced to ground five of its aircraft, with the lessors starting to take back their planes following delay in payments. The airline follows a sale and lease model, where it sells new aircraft to lessors before leasing them back. Of its fleet of 124 aircraft, the airline owns 16. It had planned to sell these 16 aircraft to raise at least $500 million, but the process is in limbo over valuation disagreements. However, industry executives said the impact could be limited and temporary, as Jet Airways seems to be close to raising funds.
SBI, a lender to Jet Airways, may end up owning 15% equity stake in the cash-strapped carrier after the airline gets consent for a debt to equity swap, TV channels reported on Tuesday. Jet Airways said on Monday it would seek shareholders’ nod in a specially convened meeting on February 21, to convert existing debt into equity, raise more funds through issue of fresh equity and preference shares and allow its lenders to nominate a director on its board as part of efforts to resolve its financing problems.
Jet Airways shareholders will vote at a specially convened meeting on February 21 on the company’s proposal to issue new equity and preference shares and convert a part of existing debt into equity. The cash-strapped airline will also ask shareholders to allow its lenders to nominate directors to its board. Jet has proposed to increase its share capital from Rs 200 crore to Rs 2200 crore through issue of additional 50 crore equity shares and 150 crore preference shares. Jet has a debt of Rs 8,052 crore as on September 30, 2018.
Jet Airways said on Monday it would seek shareholder approval to issue new equity and convert existing debt into equity among other things at a special meeting on February 21. The company will also seek approval to allow its lenders to nominate directors to its board, the airline said. Jet has a debt of $1.14 billion as of September 30, 2018. Jet, India's biggest full-service carrier by market share, owes money to pilots, lessors, banks and vendors. The airline is reeling under the pressure due to higher oil prices and intense pricing competition in the domestic airline market.