Mumbai: Late night this past Tuesday 16 April 2019, Jet Airways was informed by the State Bank of India (SBI), on behalf of the consortium of Indian Lenders, that they were unable to consider its request for critical interim funding.
Since no emergency funding from the lenders or any other source was forthcoming, the airline would not be able to pay for fuel or other critical services to keep its operations going.
Consequently, with immediate effect, Jet Airways has been compelled to cancel all its international and domestic flights.
The last Jet Airways flight operated on Wednesday.
Through its emergency communique, Jet Airways has announced that now it shall await the bid finalisation process by SBI and the consortium of Indian Lenders.
In its response to the airline, the lenders have said, “The Expressions of Interest (EOI) have been received and bid documents have been issued to the eligible recip-ients today. The bid documents inter alia has solicited plans for a quick revival of the company. The bid process will conclude on 10th May 2019 … We are actively working to try and ensure that the bid process leads to a viable solution for the company.”
Jet Airways has assured that it will continue to support the bid process initiated by the lenders.
In the meanwhile, Jet Airways has informed all guests about the temporary suspension of flight operations via text message or email to the contact details listed in their bookings.
CLICK HERE for Message from Jet Airways CEO
On March 25, when the Chairman of Jet Airways Naresh Goyal stepped down, the Board of Directors of the airline had approved the following:
The conversion of INR 1 of Lenders’ debt into equity by the issuance of 11.4 crore equity shares, in accordance with the RBI Circular of 12th February, 2018.
With this, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways.
Reconstitution of the Board of Directors of the Company by:
Resignation of Promoter, Naresh Goyal, Ms. Anita Goyal, and Kevin Knight, nominee director of Etihad Airways from their positions on the Company’s Board.
The two nominees of the Promoter and one nominee of Etihad Airways will continue on the Board.
Two lender nominees will be inducted to its Board, subject to the receipt of requisite approvals.
As part of the Resolution Plan, the Lenders will provide an immediate interim funding support of INR 1500 crore to Jet Airways. The Company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner. The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline’s long term transformation to continue expansion and to regain its position as a global player.
An Interim Management Committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey & Co.