New Delhi/ Mumbai: Crisis-hit Jet Airways on Wednesday said discussions are “progressing well” with stakeholders on a comprehensive resolution plan that also contemplates equity infusion and consequent changes in its board of directors.
Amid concerns over Jet Airways’ financial position and battering of shares on the stock exchanges, the airline said it continues to ensure that the safety and operations are not impacted.
On Wednesday, the civil aviation ministry expressed hope that the airline, its strategic partner Etihad and lenders reach a “common plan” to deal with the situation. Sources said Jet Airways officials held a meeting with lenders. Specific details about the meeting could not be immediately ascertained.
In an unusual move, the airline issued two statements on Wednesday, saying that it has been working on various cost cutting measures, debt reduction and funding options. 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 issued in the afternoon, 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.
Citing the board’s decision taken in August 2018, the airline said it has been working on various cost-cutting measures, debt reduction and funding options. Infusion of capital and monetisation of assets, including the company’s stake in its loyalty programme, in consultation with various key stakeholders, are being looked at.
According to the airline, the resolution plan contemplates various options on the debt-equity mix, proportion of equity infusion by the various stakeholders and the consequent change in the composition of the board of directors. The implementation of the resolution plan, once approved by all the stakeholders, would be subject to receipt of applicable statutory, regulatory, contractual and corporate approvals and consents.
Late in the evening, Jet Airways issued another statement asserting that it is actively “engaged with the stakeholders on a resolution plan, which is progressing well”. The company remains committed to all its guests and employees and continues to ensure that the safety and its operations are not impacted, it added.
In the second statement, the beleaguered airline also “vehemently” denied and described as misleading in nature the conjecture being made about the longevity of the operations of the company by a section of the media. Shares of Jet Airways plunged nearly 8 per cent to end at Rs 271 on the BSE. Meanwhile, an airline official Wednesday said it has deferred deliveries of Boeing 737 MAX planes.
The airline was to induct 11 Boeing 737 MAX planes by March this year and so far it has taken delivery of only five such aircraft. According to reports, Jet Airways’ strategic partner Etihad Airways is looking to hike its stake in the airline. Responding to queries about the reports, an Etihad spokesperson told PTI, “Etihad does not comment on rumour or speculation”.
As per reports, Etihad might have to make an open offer in case it is hiking the stake in Jet Airways. On a question on Etihad Airways reportedly seeking exemption over the open offer, Civil Aviation Secretary R N Choubey said the issue is being discussed amongst the promoters and the lenders.
“We hope that the three Jet Airways, Etihad and the lenders come together and decide on a common plan,” he said in Mumbai.