Mumbai: The lenders to Jet Airways, led by State Bank of India (SBI), might take a haircut (write-off) of up to 25 per cent on the airline’s Rs 8,500-crore debt.
The resolution plan in this regard would be ready by mid-February. By then, Etihad Airlines, which owns 24 per cent in Jet, aims to conclude its own examination ('due diligence') on the airline's issues.
A banking source said banks will have to make provisions for 15 per cent of the exposure to Jet Airways, as per the RBI's existing norms. Besides they have a window post-default to find a solution to an account, to avoid coming under the ambit of the Reserve Bank of India's circular of February 12 last year which bans any debt restructuring. An appeal against the circular is before the Supreme Court.
Jet defaulted on the debt payment due in the December quarter; its interest cost was Rs 230 crore in the earlier one. Under the resolution plan, the lenders would end up having a sizable portion of shares in the airline, if their boards of directors agree to convert part of their debt into equity. Etihad has already warned that Jet will require equity funding in excess of the amount currently mentioned in the draft resolution plan of the banks. Also, that it would not invest a “single penny” more without first getting the regulatory approvals on matters such as not making an open offer.
17/01/19 Dev Chatterjee/Business Standard
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The resolution plan in this regard would be ready by mid-February. By then, Etihad Airlines, which owns 24 per cent in Jet, aims to conclude its own examination ('due diligence') on the airline's issues.
A banking source said banks will have to make provisions for 15 per cent of the exposure to Jet Airways, as per the RBI's existing norms. Besides they have a window post-default to find a solution to an account, to avoid coming under the ambit of the Reserve Bank of India's circular of February 12 last year which bans any debt restructuring. An appeal against the circular is before the Supreme Court.
Jet defaulted on the debt payment due in the December quarter; its interest cost was Rs 230 crore in the earlier one. Under the resolution plan, the lenders would end up having a sizable portion of shares in the airline, if their boards of directors agree to convert part of their debt into equity. Etihad has already warned that Jet will require equity funding in excess of the amount currently mentioned in the draft resolution plan of the banks. Also, that it would not invest a “single penny” more without first getting the regulatory approvals on matters such as not making an open offer.
17/01/19 Dev Chatterjee/Business Standard
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