SBI charts a new course for Jet without Naresh Goyal, Etihad

MUMBAI: State Bank of India (SBI), the biggest lender to Jet Airways (India) Ltd, has proposed a new plan to revive the ailing carrier that involves a total fund infusion of ₹9,535 crore, and the exit of founder Naresh Goyal and Etihad Airways PJSC.

The plan includes an equity infusion of ₹3,800 crore by two unidentified investors and a ₹850 crore equity infusion by state-run lenders led by SBI, ₹485 crore on behalf of public shareholders that will be achieved through banks underwriting a rights issue, additional debt of ₹2,400 crore and non-fund based facilities of ₹2,000 crore, according to the plan reviewed by Mint.

The resolution plan also proposes a complete exit of Abu Dhabi-based Etihad Airways, as well as large haircuts for lenders, including a write-off of debt by the domestic lenders to Jet Airways.

Last month, the lenders committed a fund infusion of ₹1,500 crore, which was conditional on the resignation of Goyal from the board. A shutdown of Jet Airways and consequent job losses would have been a setback for the Narendra Modi administration, ahead of national polls.

According to the new plan, both Goyal and Etihad will transfer all their shares, 51% and 24% stakes, respectively, in the airline to an independent trust managed by trustees, who will be appointed by the lenders. The trustees will have a call option on the shares owned by the trust at ₹150 apiece. The resolution plan is subject to approval by various stakeholders.

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