Jet Airways chairman Naresh Goyal has sought an urgent funding of Rs 750 crore from its equity partner Etihad, citing “the very precarious” position of the airline following lingering cash flow issues.
The Etihad board is meeting in Abu Dhabi on Monday to decide on certain crucial issues. Jet on Monday defaulted on the part-repayment of its external commercial borrowings because of a liquidity crunch. Specific details about the borrowings were not disclosed.
On Sunday, media reports said Jet had secured a Rs 2,050-crore loan from PNB. This is now denied. This makes its plea to Etihad for an immediate release of Rs 750 crore even more desperate.
Goyal made his plea in a letter to the Gulf-based carrier’s group chief executive Tony Douglas. It comes at a time when close to 49 aircraft from Jet’s fleet of around 119 planes have been grounded, largely because of the non-payment of lease rentals. A bank-led resolution plan has not made any significant headway, with lenders awaiting fund infusion from its partner.
The Jet Airways founder further said in the letter that the airline has secured the go-ahead from the aviation ministry to pledge its shares in JetPrivilege to secure interim funding.
The airline holds a 49.9 per cent stake in the loyalty programme, while the majority is with Etihad.
“I now look forward to your support and co-operation 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, according to the resolution plan,” Goyal said in a letter dated March 8.
He further warned that if the interim funding was not received at the earliest it would be severely “deleterious” to the future of the carrier and could even result in its “grounding”.
“Any conditions precedent to the Rs 750-crore infusion by Etihad 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.
Etihad had earlier sought exemption from Sebi’s open offer norms should its stake cross 26 per cent following any funds infusion. However, the Sebi board had decided early this month that exemption from an open offer would be only allowed to banks and financial institutions or the lenders.
