After posting huge losses and incurring payment defaults to vendors in 2018, there appears to be a sliver of hope for India’s Jet Airways as lenders are now seemingly open to buying a stake in the debt-laden airline.
A decision is expected on Wednesday as the airline and lenders, led by the State Bank of India (SBI), are scheduled to meet in Mumbai. Banks have now initiated steps for a resolution of the stressed asset in accordance with the Reserve Bank of India (RBI) norms, Business Standard reports.
Last month SBI appointed consulting firm Ernst & Young to carry out a forensic audit of the airline’s accounts following complaints of fund diversions. However, no wrongdoing was found during the audit, the daily added.
The airline, which defaulted on principal and interest payments due in December, has a debt burden of over 80 billion rupees (US$ 1.13 billion) and is scouting for fresh infusions of funds.
The airline founder and chairman, Naresh Goyal, will have to step down from the Jet board after being at the helm for 25 years. However he may retain a role in the company as chairman emeritus. His son Nivaan, who is a Jet executive, may be inducted into the board.
Earlier on Monday CNBC TV reported that Jet’s partner Etihad Airways might increase its stake in the airline from its current 24% holding.
Shares of Jet Airways soared by over 18% on Monday and on Tuesday its stock price touched an intra-day high of 313.50 rupees on the National Stock Exchange, compared to the previous day’s closing price of 294.45 rupees.