Banks will evaluate the funding needs of Jet Airways amid the ongoing process of finding an investor for the crisis-hit airline.
The airline has reportedly initiated discussion with banks, led by the State Bank of India, for a short-term working capital requirement of around Rs 1,500 crore.
“Some of the lessors have said they are willing to release the planes provided some guarantee is being issued to them. We need to evaluate that. Money will be released against the benchmark with the sole intent of ensuring that the airline does not get grounded while the process of finding an investor is being completed,” Arijit Basu, managing director of the SBI, said on the sidelines of the launch of an SBI wealth hub at the Chowringhee branch on Friday.
The bank aims to have 55 such centres by 2020 to cater to the requirements of its high-value clients.
Basu said the bank had no intention of running the airline but wanted to facilitate the process of finding an investor. “It is not the intention of the banks to run the airline for a single day, but to facilitate the process of finding an investor,” he said.
The directors of Jet Airways have approved a bank-led resolution plan, which was received from lead lender SBI. The provisions of the plan were based on a circular issued by the RBI. The scheme envisages conversion of the debt of the lenders into equity shares; Jet would allot 11.40 crore shares that will make the lenders the largest shareholder.
Banks will get a 50 per cent stake in the full-service carrier for an aggregate consideration of Re 1. “Once the approvals are through we will convert and let the process start,” said Basu.
Basu said an interim management committee would work towards running Jet Airways over the next couple of months till a new investor is found. The task of the committee will be to prevent further erosion in the value of the airline.
Over 1,000 pilots of the struggling private carrier Jet Airways have decided to go ahead with their “no flying” call from April 1 following the airline failing to receive funds from the banks on Friday, its pilots guild has said.
“We will have this oversight committee headed by one of the independent director who will oversee the process. If he is not an aviation expert, there will be a consultant to guide him and an auditor,” Basu said.