Jet Airways (India) Ltd recovered sharply from the day’s low after a media report said that the lenders are expected to respond to investment proposals by Etihad Airways and the Hinduja Group as early as today.
As quoted by the report, a senior industry executive said, “June 10 is when the banks will signal whether things are moving to the next stage.” The Jet Airways stock had fallen as much as 9% in early trade on Monday, but it cut most of its losses to trade at Rs 123.70, down 1.4%, at 2pm.
The report quoted another executive as saying that banks have received the ‘green signal’ from the Prime Minister’s Office (PMO) to go ahead with the deal, indicating that they might be ready to take a haircut. “In an ideal situation, the plane should be airborne by mid- to end-July,” the executive added.
Both Etihad Airways and the Hinduja Group reportedly want to hold a minority stake in Jet Airways. While Etihad wanted to retain its 24% stake in Jet Airways, the Hinduja Group was also looking for a little less than 25% holding.
However, the Rs 8,000 crore debt on Jet Airways was an issue of contention in talks involving Etihad Airways, Hinduja Group and banks, led by State Bank of India (SBI). While Etihad Airways and Hinduja Group wanted banks to take a deep haircut, as much as 85%, the lenders were reluctant to do so, instead waiting for a signal from the government.
Meanwhile, in a related development, two of the Jet Airways suppliers, Mumbai-based Shaman Wheels and Ahmedabad’s Gaggar Enterprises, have approached the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against the airline.
The NCLT on Monday adjourned the matter to 13 June and asked the creditors to serve notice to Jet Airways for dues, according to a report.
The banks have been trying to avoid the insolvency court to recover maximum dues. In the scenario of NCLT accepting the petition, the banks will have to join the plea and will be staring at a huge haircut on their dues.
Source: News18