Domestic lenders of the beleaguered carrier Jet Airways, led by State Bank of India, are understood to have proposed a Rs 2,500-crore resolution plan comprising fresh equity infusion and restructuring of the current loan at a meeting between the consortium of banks and Jet officials on Tuesday.
Sources in the know of development told FE that if the resolution plan gets approved by the lenders, Jet Airways promoter-chairman Naresh Goyal’s current 51% equity in the company will get diluted and come to below 20%. According to the contours of the proposal by the lenders, Jet and Abu Dhabi-based Etihad Airways, which currently has a 24% stake in the carrier would be required to infuse Rs 1,500 crore into the airline. The lenders on their part will restructure loans worth Rs 600 crore and Goyal in his personal capacity would be required to bring in Rs 400 crore.
With this, Etihad s stake would rise to 30% from the existing 24% and the debt restructuring by the lenders, by converting a part of debt into equity and some fresh funds, would give them a stake of around 40%. Sources said that since the conversion of debt into equity will be below par, there will be a significant dilution of the existing shareholders’.
It is not clear if Goyal has agreed to the terms and losing control over the airline. However, even if the resolution plan gets approved by the lenders, it will not be implemented until the forensic audit by EY, currently underway, is complete.The airline has been going through a financial turmoil since August this year; it defaulted on its payments to the banks of both principle and interest on December 31. It has a turnaround plan currently underway that targets savings of over Rs 2,000 crore over a two year period. Jet s total debt stands at Rs 8,000 crore and it owes Rs 3,000 crore to its vendors.