Seek emergency funding of Rs 400 crore from lenders; Board considers temporary shutdown; Goyal out of bidding for the airline
Jet Airways veered closer to shutdown on Tuesday as it sought emergency funding of Rs 400 crore from its lenders and said that it would have no option but to halt operations from today if the money was not forthcoming.
The Naresh Goyal founded airline, which till recently had 119 aircraft in its fleet, is currently flying just five aircraft, most of which are smaller ATRs.
An airline executive said that everything will depend upon the interim funding from the lenders and he is "not sure" whether the airline will operate on Wednesday. Further, Jet Airways in a regulatory filing said that in view of the critical liquidity position, its operations have been severely impacted and its awaiting emergency funding from lenders in this regard.
The airline management held frenetic meetings with lenders, civil aviation ministry officials and aviation regulator Directorate General of Civil Aviation (DGCA) on Tuesday. Earlier in the day, its Board meeting in Mumbai considered shutting the airline "temporarily" till it gets funding. Sources said that lenders, on their part, are weighing the seriousness of the bids received before firming up on plans of funding. They may, however, release small amount just to keep the skeletal operations running or else the airline may end up losing Aircraft Operator Permit (AOP). "It is likely that the lenders may release some funding tonight," said the source.
To make the matter worse, the US Exim Bank is reported to have recalled all loans to Jet Airways for purchase of Boeing aircraft. The loan amount is said to be around Rs 2,000 crore and the bank is likely to take possession of all the aircraft in order to recover the dues. An email sent to US Exim Bank did not elicit any response till the time of going to press. Meanwhile, the pilots union, National Aviators Guild (NAG), which has over 1,100 pilots out of the total 1,600 have threatened to take the airline NCLT if their salaries are not paid. The top management, pilots and engineers have not been paid since January.
In another significant development, promoter Naresh Goyal, who had participated in the Expression of Interest (EoI) issued by the lenders on Friday is believed to have decided to withdraw from the bidding process. Sources said it was because some of the bidders, including equity partner Etihad Airways, were not happy with it and threatened to walk out if Goyal was allowed.
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