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SBI along with other lenders, stakeholders working on resolution plan: Jet Airways

Crisis-hit Jet Airways Wednesday said State Bank of India along with other lenders and stakeholders is working on a comprehensive resolution plan to turnaround the airline.

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Crisis-hit Jet Airways Wednesday said State Bank of India along with other lenders and stakeholders is working on a comprehensive resolution plan to turnaround the airline.

The full service carrier, which has been grappling with financial woes, defaulted on loan repayment to a consortium of Indian banks led by State Bank of India (SBI) on December 31, 2018.

In a statement, the airline said a resolution plan that contemplates various options, including proportion of equity infusion by various stakeholders and the consequent change in the company's board, is being worked out.

"SBI in consultation with the other members of the consortium and the other stakeholders has been working on a comprehensive resolution plan towards a turnaround of the company for its sustained growth and restoration of financial health," Jet Airways said.

The airline also said the resolution plan is presently under active discussion amongst the stakeholders and that the various options are yet to be crystallised and agreed to by the stakeholders in the best interests of the company.

Earlier, CNBC-TV18 reported, Etihad Airways has offered to pick up shares of debt-laden Jet Airways Ltd (JET.NS) at a 49 percent discount and to immediately release $35 million to bail out the troubled carrier if certain conditions are met. 

Shares of Jet Airways, in which Etihad already has a 24 percent stake, fell as much as 7.5 percent to 271.75 rupees ($3.83) in their biggest intraday drop since early December, after CNBC-TV18 reported that Etihad had offered to pay 150 rupees for each share of the Indian airline.

The report cited as its source a letter from Etihad’s CEO Tony Douglas to the State Bank of India (SBI.NS), Jet’s biggest lender, about a restructuring plan for the Indian carrier.

While Jet controls over a sixth of its home market, its margins, like that of other local players, have been eroded by high fuel taxes, a weak rupee and intense price competition, leaving it with about $1.14 billion in net debt as at the end of September and a pile of dues to pilots, lessors and vendors.

In fact, some lessors are even exploring the possibility of taking back aircraft, three people familiar with the matter told Reuters last week.

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