DNA Money Edit: Will Jet fly with lenders' wings?

Will the latest round of activities to rescue the debt-ravaged Jet Airways move to a logical conclusion? A group of financial institutions led by the State Bank of India (SBI) is now spearheading a massive debt restructuring exercise that may result in banks taking for the first time the reins of an airline company.

History reminds banks that owning private and mismanaged assets should not create a fresh problem for them, of finding a new buyer and offloading stake, something that they have failed miserably in the past. Like most other airlines, Jet Airways too doesn't own many physical assets. 

Leasing companies have already started grounding their planes and calling back assets. If this continues, there are chances that more aircraft may get grounded. The handful of planes that the company actually owns won't have any passengers to carry. Add to it the risk of managing the disgruntled staff and keeping a track of the safety norms.

SBI's conversion of Jet's debt into equity needs consent from a minimum of 17 banks out of a total 26 lenders who, on an aggregate have extended more than Rs 8,500 crore. The consent is still elusive with many members of the lenders' consortium now alleging lack of cooperation from SBI. It is to be seen how far the one rupee coin offered for Jet Airways rolls.