Jet Airways, the 25-year old airline is in $1 million debt. It owes money to banks, suppliers, pilots and lessors.
Naresh Goyal, founder of the airline said that, “Let banks explore all possible options. Under the inter-creditor agreement (ICA) they have more room for seeking resolutions as compared with restricted format under IBC.”
The SBI chairman, Rajnish Kumar, told reporters after a meeting with government officials that, “We believe that it is in everybody’s interest that Jet Airways continues to fly.” He also said that putting Jet Airways to bankruptcy is the last option. Etihad, who is the largest shareholder of Jet is expected to secure this rescue deal. Mr. Kumar also hinted that there may be a possibility of bringing a new investor.
The National Investment and Infrastructure Fund (NIIF) has agreed to pump in up to Rs 1,900 crore. The reports also say that, the state government as asked the state banks to get Jet Airlines out of this bankruptcy issue.
Besides the repercussions declaring bankruptcy are not good. Grounding of Jet Airways could mean 23,000 employees losing jobs, something the government would like to avoid before the elections.
“The pilots and engineers are now almost three months behind salaries… and facing a lot of financial hardships with no relief in sight,” it said.