Jet Airways may not fly beyond April if it does not get Rs 1,500 crore in a week
The recent Supreme Court ruling that struck down the RBI's February 12 circular - outlining a revised framework for resolution of stressed assets - may throw a spanner in the works for the airline already battling crises on multiple fronts
- Apr 4, 2019,
- Updated Apr 4, 2019 12:32 PM IST
Although Jet Airways' promoter Naresh Goyal released a statement on Wednesday saying he has "signed on the dotted line as required to ensure release of the much needed funds committed by the lenders", the beleaguered airline's woes are far from over. Battling crises on multiple fronts, from grounded planes to disgruntled and unpaid employees threatening to go on strike, it may be racing against the clock to stay afloat.
"Jet Airways won't be able to operate beyond April if it doesn't get the entire promised debt funding of Rs 1,500 crore from its lenders in a week, its top management has estimated internally," sources in the know told The Economic Times.
But the recent Supreme Court ruling that struck down the RBI's February 12 circular - outlining a revised framework for resolution of stressed assets - may throw a spanner in the works. The cash-starved Jet Airways on Wednesday deferred payment of March salaries citing "complexities" in the finalisation of the debt-recast plan, under which the SBI-led consortium of lenders took over the reins of the airline last month.
The resolution plan involves converting the airline's debt into equity - a 50.1% stake - for a notional value of Re 1 per share, as per the RBI's circular, which has now been declared unconstitutional and ultra vires (acting or done beyond one's legal power or authority). Hence, the promised emergency infusion from the lenders to meet operating costs is now held up on "technical" grounds.
Although Jet Airways' promoter Naresh Goyal released a statement on Wednesday saying he has "signed on the dotted line as required to ensure release of the much needed funds committed by the lenders", the beleaguered airline's woes are far from over. Battling crises on multiple fronts, from grounded planes to disgruntled and unpaid employees threatening to go on strike, it may be racing against the clock to stay afloat.
"Jet Airways won't be able to operate beyond April if it doesn't get the entire promised debt funding of Rs 1,500 crore from its lenders in a week, its top management has estimated internally," sources in the know told The Economic Times.
But the recent Supreme Court ruling that struck down the RBI's February 12 circular - outlining a revised framework for resolution of stressed assets - may throw a spanner in the works. The cash-starved Jet Airways on Wednesday deferred payment of March salaries citing "complexities" in the finalisation of the debt-recast plan, under which the SBI-led consortium of lenders took over the reins of the airline last month.
The resolution plan involves converting the airline's debt into equity - a 50.1% stake - for a notional value of Re 1 per share, as per the RBI's circular, which has now been declared unconstitutional and ultra vires (acting or done beyond one's legal power or authority). Hence, the promised emergency infusion from the lenders to meet operating costs is now held up on "technical" grounds.