Monday, January 21, 2019

Banks ask Naresh Goyal to pump in Rs 3,000 crore in Jet Airways

Banks have asked Jet Airways chairman and founder Naresh Goyal to bring in an equity of at least Rs 2,500-3,000 crore for them to agree on a long-term restructuring package to save the floundering airline, whose losses have crossed Rs 1,200 crore for the half year ended September 2018. Having failed to cobble up the money, one of the main demands of the bankers, the airline is yet to sign the resolution plan. The deadline for implementing the revival plan is June 30, 2019, failing which the banks will be forced to take the airline to National Company Law Tribunal (NCLT).

"The money on offer by Goyal will not be enough for banks to undertake a viable restructuring package.Unless there is an equity influsion of at least Rs 3,000 crore we will be unable to undertake a restructuring exercise which would include additional loans, extension in repayments," said a banker who is part of the consortium that lent money to the airline.

Last week Naresh Goyal last week in a letter to SBI chairman had said that he will bring in Rs 700 crore and that his equity holding in the company should not fall below a threshold of 25%.

In April 2013, United Arab Emirates (UAE) headquartered Etihad Airlines bought a 24% stake in Jet at a 31.7% premium to Jet's share price Rs 573.85. But now Etihad is bargaining hard to raise its stake to 49% from 24% at Rs 150 a share, a steep discount from the prevailing share price of Rs 276.86 and immediate infusion of $35 million into the airline. Etihad CEO Tony Douglas has also insisted on the complete exit of Naresh Goyal and his family from the management of the carrier. He has also demanded that Goyal's future role as chairman emeritus should also be defined.
21/01/19 Manju AB/DNA