Indian lenders led by State Bank of India (SBI) on Tuesday (8) proposed a $900 million resolution plan to debt-ridden country’s Jet Airways (India) Ltd, a local media report said.
The latest resolution plan comprises of fresh equity infusion and restructuring of $450m of loan, Indian daily Mint reported citing two sources familiar with the development.
If the airline’s turnaround plan approved by all the stakeholders, then the company’s founder chairman Naresh Goyal’s stake is likely to fall below the current level of 51 per cent.
The latest plan was discussed and shared with the stakeholders in a meeting chaired by SBI and attended by Jet Airway’s chairman Goyal and officials from Etihad Airways, which has 24 per cent stake in the airline, the sources said.
According to the current plans which are yet to be finalised, Naresh Goyal and Etihad jointly pump $450m in the airline whereas, local lenders will restructure another $450m of the airline’s debt, which is up for maturity between now and March 2019.
The final plan is expected to be put in place by the end of this month and the banks expect that the resolution plan is likely in force by March 31 2019, well before the 180-day duration under the country’s central bank’s circular.
The Reserve Bank of India’s circular relates to how banks required to deal with stressed assets. The circular noted that a resolution professional should be appointed within 180 days for defaulting accounts with a total exposure of Rs 20 billion and more.
Last week, the airline defaulted on its debt repayment to a consortium of Indian banks.
The business was started by Sir Anwar Pervez.getty images
