MUMBAI: State Bank of India (SBI) chairman Rajnish Kumar is confident that the restructuring of debt laden Jet Airways could yield results as soon as the next one week. Without giving details, Kumar who is personally monitoring the restructuring as the chief of the bank with the largest exposure to the beleaguered airline said that the process which started in November is progressing well.

“SBI’s desire is that the airline keeps on running. The bank led effort is to see that the resolution plan happens…it should not take a month…in the next one week you should have something,” Kumar told reporters on the side lines of a function at the bank headquarters.

Jet Airways owes lender led by State Bank of India more than Rs 8,000 crore. Lenders are currently working out a restructuring plan for the airline under a scheme called Project Sashakt which includes conversion of debt into equity.

Kumar did not give details of the progress that has been achieved of the restructuring so far. “It is still work in progress and we will have a solution soon. This resolution process was started on November 1. It is a complex process; it does not happen in one of two days or even 15 days because there are various stakeholders whose interests have to be aligned like lenders, promoters and join venture partners so there are various parts to it,” Kumar said.

Jet Airways owes about Rs 2,000 crore to SBI, making it the airline’s largest lender. Under the provisional resolution plan proposed by lead lender SBI last month, banks are likely to convert a part of the debt into 114 million shares by paying a token Re 1 apiece based on the Reserve Bank of India (RBI) restructuring guidelines. This will give lenders a majority 50.1% shareholding in the company. However, this plan is contingent on the airlines promoters bringing in fresh equity into the company.

READ  Croatia suffers from lack of workers, struggles to catch up with rest of EU

The airline is also in need of emergency funding from banks to ensure its days to day management. However, banks are yet to agree on how much they can infuse into the airline. Not all lenders agree on the amount to the infused and no lender wants to take any additional burden.

On Thursday the CEO’s of two other public sector banks, Bank of India and Punjab National Bank which are also creditors to Jet said that they are ready to fund Jet Airways but only in proportion to their individual current exposure.

Jet Airways posted its third consecutive quarter of losses in October-December period. It swung to loss of Rs 588 crore from a profit of Rs 165 crore a year earlier. Though total revenue increased, earnings before interest, taxes, depreciation and amortisation (ebitda) slumped 54.33% to Rs 459.50 crore from Rs 1,006.30 crore a year ago, reflecting the airline’s dire financial position.



Please enter your comment!
Please enter your name here