Jet Airways (JAI, Mumbai International) is nearing securing a rescue loan from State Bank of India (SBI) as its creditors and suppliers are increasingly worried about the financial standing of the airline, Reuters has reported.
The airline is due to meet with a number of its creditors and suppliers, including many international, on January 8. During the meeting, the representatives of the SBI are also expected to present the situation regarding further loans to the struggling carrier.
Jet Airways is reportedly seeking INR15 billion rupees (USD215 million) from the SBI for its short-term cash needs. In December, the bank agreed in principle to provide the fresh loan subject to a forensic audit of the carrier's books, which is still ongoing. Among the ideas floated by the SBI is securitising a part of the new debt against future ticket sales, in a process wherein the bank will receive a certain amount of money per each ticket sold. Such securitisation would only cover a part of the new loan.
The SBI itself has an exposure of some INR16 billion rupees (USD230 million) to the airline.
The Economic Times separately reported that the airline is trying to renegotiate contracts with its suppliers, including aircraft lessors, to reduce current expenses. Lenders have reportedly asked the airline to provide a sustainable revival plan by the end of January.
Jet Airways defaulted on its loans from a consortium of Indian banks led by the SBI on January 1, 2019. It also delayed December wage payments to its pilots.
The carrier is also in talks with its 24% owner Etihad Airways (EY, Abu Dhabi International) about a fresh capital injection, although the talks have reportedly stalled over the reduction of Naresh Goyal's controlling stake.
