SBI is the lead member of the consortium while PNB has a significant exposure to the airline
Jet Airways lenders are likely to infuse emergency fund shortly as part of a revival plan for the cash-strapped private airline, a senior government official said on Tuesday.
The lenders, including State Bank of India (SBI) and Punjab National Bank (PNB), met Department of Financial Services (DFS) secretary Rajiv Kumar on Tuesday.
SBI is the lead member of the consortium while PNB has a significant exposure to the airline.
"The lenders are committed to Jet Airways revival. Discussions for reviving the airline are going on. Nothing has been finalised as of now," PNB managing director and CEO Sunil Mehta said after the meeting.
SBI and its investment banking subsidiary SBI Capital Markets are working on Jet's revival plan, which includes an emergency funding, he said.
"Jet has requested Rs 400 crore from banks," said civil aviation secretary Pradeep Singh Kharola. Banks are yet to respond to the request of interim funding.
According to a government source, "Funding from lenders is likely to come through. Lenders are not looking to take the company to National Company Law Tribunal (NCLT)."
Jet is on the verge of shutting down due to a severe cash crunch and a debt burden of around Rs 8,500 crore. It is down to flying five planes out of a fleet of 120 with its international flights already suspended.
"The lenders are not in favour of taking the company to the NCLT as they will have to take a massive haircut and will not be able to realise value from their investments in the airline company," a finance ministry official said.
"The lenders are working on a plan to keep the airline as a going concern till the airline finds an investor. The assets of the airline mainly include air routes and slots while most aircraft are on lease. It does not have many tangible assets that can help lenders realise the value of their investment," said another official.
The lenders expect the process of selection of bidders to be completed by May 7. The SBI-led consortium of lenders had called for expression of interest for buying a controlling stake in Jet Airways. Etihad Airways, National Investment and Infrastructure Fund (NIIF) and private equity firms TPG Capital and Indigo Partners were shortlisted on Monday to place binding bids for Jet Airways.
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