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After employees, now Jet Airways’ frequent flyers propose ‘Roja’ revival plan to SBI, PNB, ICICI Bank

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A group of cash-strapped Jet Airways’ frequent flyers along with nine banks, which have lent capital to the airline, have proposed a leveraged buyout plan called ‘Revival of Jet Airways Plan’ or ‘Roja’ to State Bank of India (SBI), Punjab National Bank, and ICICI Bank among key lenders.

The group led by one Sankaran P. Raghunathan had claimed themselves to be reputed professionals as well as minority shareholders in the beleaguered airline have submitted the plan’s presentation to employee unions, bankers, pilots, engineers and other stakeholders, IANS reported.

Earlier a group of Jet Airways’ employees had proposed take over of management control and arrange up to Rs 3,000 crore from external investors.

The plan by flyers and banks suggested employee take over of the company followed by raising loan from current lenders to invest and become part-owners of Jet Airways.

The presentation showed a bank loan of Rs 1,500 crore to be given to employees as their six-month salary as a personal loan. Employees will acquire stakes of 51 per cent and 12.5 per cent from SBI and Etihad respectively with the money received. The remaining Rs 200 crore would be used for new shares by the company. Through this proposal, employees will have control over the airline, according to the presentation reviewed by IANS.

After this, the plan is to raise capital involving frequent flyers. The presentation said that pre-selling tickets would help raise up to Rs 8,000 crore as banks can be persuaded to offer personal loans to flyers who would purchase four tickets (Rs 10,000 each). The tickets would be valid for two years.

The employees currently controlling the airline would authorise an additional issue of shares on a preferential basis — 100 shares each for Rs 150 each — through a resolution, to flyers buying four tickets that would help airline raise Rs 12,000 crore.

Rs 20,000 crore raised will be deployed towards operational working capital and to repay creditors over five years, the presentation said.