Jet Airways says talks still on, SBI says ‘planes must keep flying’

Jet Airways said talks between various stakeholders in the company, including banks and investors like Etihad Airways, are still on, and that it is too early to comment on the likely outcome.

Meanwhile, SBI’s chairman said a rescue plan will be ‘out very soon’.

He also denied any plans to take the country to the bankruptcy court, and said it was in everybody’s interest to keep the planes flying.

“There is a unanimity that till such time that all hope is not lost, efforts should be made to keep the planes flying. Everybody agrees that Jet Airways is a good aviation company,” said SBI chairman Rajnish Kumar.

The SBI chairman also denied that the bank was under pressure from the government to ‘bail out’ the airline, and said it was acting purely out of its commercial interest.

Responding to a regulatory notice asking if Etihad was planning to exit Jet Airways, the Indian airline said different stakeholders were still discussing a restructuring plan submitted by primary lender State Bank of India on February 12.

“The BLPRP (plan), inter alia, contemplates various options on the debt-equity mix and proportion of equity infusion and the stakeholders are closely engaged to arrive at mutually acceptable solution,” it said.

The airline’s stock has fallen by about 5% today to Rs 218.05 on the NSE, after The Hindu Business Line carried a report saying that Etihad would exit Jet Airways. The fall was also a reaction to the grounding of six more aircraft by the debt-ridden carrier yesterday.

The report by HBL said Etihad is willing to sell its 24% stake in the Indian carrier at Rs 150 per share to State Bank of India.

The airline has debt of around Rs 7,000 cr, and has not been able to pay money to its employees and suppliers in recent days.

If various stakeholders, including promoter Naresh Goel, are not able to thrash out a mutually acceptable deal to rescue the airline, it will pass into the hands of the lenders.

However, it remains to be seen whether the banks will be able to extract any value from the airline.