A consortium of banks is considering an interim funding of Rs 500 crore for debt-laden Jet Airways but a final decision is yet to be taken, Punjab National Bank Managing Director Sunil Mehta said on Friday. PNB is part of the lenders’ consortium, led by State Bank of India (SBI), that has extended loans to the airline. The full service carrier is looking to raise funds and restructure its debt. Regarding Jet Airways, Mehta said the consortium is looking at the entire process and something is being worked out.
“Of course, (the) consortium is in favour (of interim funding). It is a going concern and we would like to preserve its (airline’s) value,” he said. About interim funding for the carrier, Mehta said, “it is too premature to tell you about that plan” and the bankers are already working on it. The SBI has taken a lead on it, and let the entire plan be worked out, he said, adding that it would be too early to announce the timings.
“Rs 500 crore that you are talking about is the interim funding but banks are looking at the long term resolution of the issues for which the plan is already in place for discussions,” he noted. He was responding to a query about the banks’ extending interim funding to Jet Airways. On February 14, the board of Jet Airways approved a Bank-Led Provisional Resolution Plan (BLPRP), whereby lenders would become the largest shareholders in the airline.
Lenders are to convert part of the airline’s debt into 11.4 crore shares at a consideration of Re 1 apiece as per RBI norms. Later, appropriate interim credit facilities by domestic lenders would be sanctioned to the airline, as per a regulatory filing made on February 14. The extraordinary meeting of Jet Airways shareholders was held on February 21 where various proposals were discussed. The results of the voting on the proposals would be released on Saturday.