Says if interim funding is not received at the earliest, it could result in the carrier's "grounding"
Jet Airways's promoter Naresh Goyal, who took a tough stand when equity partner Etihad recently sought to purchase shares at discount rates, has now written a letter to the Gulf-based airline, seeking "urgent" infusion of Rs 750 crore.
Meanwhile, Etihad Airways's Board met in Abu Dhabi on Monday to discuss the resolution plan for Jet, in which it owns 24% stake. The urgent letter from Jet Airways promoter comes at a time when the airline has grounded over 50 aircraft in the recent past due to poor financial conditions.
Citing the situation to be very "precarious", Goyal, in a letter to Etihad's group chief executive Tony Douglas, also said the airline has secured the go-ahead from the aviation ministry to pledge its shares in JetPrivelege for securing the interim funding. The airline holds a 49.9% stake in the loyalty programme, while the majority is with Etihad.
"I now look forward to your support and cooperation in saving the airline by an urgent fund infusion of Rs 750 crore by early next week, so that a matching contribution from banks is also disbursed, as per the resolution plan," Goyal said in the letter dated March 8.
The company has engaged with the lender in relation to the same, it added.
On February 14, the airline's Board had approved a debt recast plan which would see the lenders becoming the largest shareholders in the airline by converting the debt into equity at a nominal price of Re 1. The same was approved by the shareholders on February 21.
"Any conditions precedent to the Rs 750 crore infusion by Etihad Airways may please be taken up with the banks and settled bilaterally with them so that the much-needed funding is made available to Jet Airways early next week," he said.
He also warned that the if interim funding is not received at the earliest, it will be severely "deleterious" to the future of the carrier and could even result in its "grounding".
In another development, Jet Airways on Monday defaulted on part repayment of its external commercial borrowings due to liquidity crunch.
Specific details about the borrowings were not disclosed.
"The part repayment of the external commercial borrowing availed by the company, for working capital purposes, falling due on March 11, 2019, has been delayed owing to temporary liquidity constraints," the carrier said in a filing to the stock exchanges.
Jet Airways has incurred a loss of Rs 3,208.23 crore during the nine months ended December 31, 2018. Its current liabilities exceed current assets by Rs 9,610.16 crore as of that date, Jet Airways records reveal.
The ruling by market regulator Securities and Exchange Board of India (Sebi) earlier this month is said to have made it tougher for the debt-laden carrier to raise funds. In January, Etihad Airways had offered to increase its stake in the airline up from 24% but sought exemption from making an open offer and preference pricing from Sebi.
As per the regulatory norms, a company has to make an open offer in case their shareholding in a listed company goes beyond a certain threshold. However, Sebi made it clear that the exemption from making an open offer in case of acquisition of over 26% in a listed company will be allowed only to banks, lenders and financial institutions.
Further, Sebi also removed the "competent authority" clause for exemption from an open offer. Etihad Airways, on its part, was banking on exemption based on the reference from aviation ministry and aviation regulator Directorate General of Civil Aviation.
(With inputs from PTI)
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 "Naresh Goyal")
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