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Jet lenders to push forward with rescue plan but no clarity on interim loan

Jet, India's oldest private carrier, has been saddled with more than $1 billion in debt, compounding its financial woes and forcing it to ground more than two-thirds of its fleet.

Reuters 

Jet Airways
It is crucial for India to ensure the survival of Jet as the fall of its second-largest airline could have "disastrous consequences for the investment climate" in the sector,

 Lenders to India's said on Thursday that they intend to push forward with their plan to rescue the troubled airline, but offered no clarity on interim funding, leaving the future of the in the balance.

Last month, Jet's lenders, led by (SBI) , agreed to bailout the in a complex deal that involved the banks taking a majority stake, while seeking out an investor to help revive the company's fortunes.

The rescue plan also included a $218 million interim loan to keep the afloat.

However, a source familiar with the matter told late on Thursday that the lenders, which also includes (PNB), were yet to decide on the interim loan for the

The two state-run banks, SBI and PNB, did not have immediate comments on the matter.

In their joint statement issued late on Thursday, the lenders said they intend to pursue the previously proposed rescue plan "in a time-bound manner under the present legal and regulatory framework."

Jet, India's oldest private carrier, has been saddled with more than $1 billion in debt, compounding its financial woes and forcing it to ground more than two-thirds of its fleet.

However, the is keen to see that the survives, as its failure will result in tens of thousands of direct and indirect job losses, potentially denting sentiment just as Indian seeks to secure a second term in a set to commence later this month.

Senior government sources familiar with the matter told last month that the had asked to keep the airline flying.

It is crucial for to ensure the survival of Jet as the fall of its second-largest airline could have "disastrous consequences for the investment climate" in the sector, a top had told

In Thursday's statement, Jet's lenders said they plan to seek expressions of interest in the airline from potential investors from April 6 and that all submissions from interested parties are expected to be completed by April 9.

The lenders said they would consider other options should the stake-sale process "not result in an acceptable outcome."

 

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Fri, April 05 2019. 10:11 IST
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