Mumbai: In an attempt to keep the airline floating, 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 the lingering cash flow issues which got amplified after the forced grounding of over 50 of its planes.
In a letter to the Gulf-based carrier’s group chief executive Tony Douglas, Goyal also said the airline has also secured the go-ahead from the aviation ministry to pledge its shares in Jet Privilege for securing the interim funding.
The airline holds 49.9 percent stake in the loyalty programme, while the majority is with Etihad. It can be noted that Etihad board is meeting in Abu Dhabi Monday to discuss the resolution plan for Jet in which it owns 24 percent stake since April 2014.
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.
On February 14, the airline’s board had approved a debt recast plan whereby the lenders would become 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”.
The shares of Jet Airways gained over 4 per cent Monday amid reports that the cash-strapped airline has secured a loan worth over Rs 2,000 crore from Punjab National Bank (PNB). Intra-day, the stock rose 4.68 per cent and closed over 2 per cent gains.
