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Lessors meet top executives of debt-laden Jet Airways, ask for payment plan

Jet Airways is trying to mop up fresh funds from a consortium of banks led by State Bank of India and strategic partner Etihad Airways

Aneesh Phadnis & Abhijit Lele  |  Mumbai 

Jet Airways
The company has defaulted on lease rent and other dues to lessors and other vendors

Representatives of aircraft leasing met top executives of and senior bankers in Mumbai on Tuesday to seek details on fundraising and commitments on rent payments.

The cash-strapped airline has defaulted on lease rent and other dues to and other vendors, several of whom have served a notice on the airline. A meeting was convened at the headquarters in Mumbai and attended by the Jet management, led by founder-chairman Naresh Goyal, to give assurance to the leasing companies, maintenance repair firms, and other The meeting takes place in the backdrop of the airline defaulting on its loan principal and interest payments for the December-end quarter. Banks have already initiated steps for the resolution of stressed asset according to Reserve Bank of India norms.

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Jet, which has posted over Rs 2,500 crore of losses in the two preceding quarters, is trying to mop up fresh funds from a consortium of banks led by and strategic partner Goyal has also been meeting senior functionaries and bureaucrats in the central government, seeking support for the airline. “The want a firm payment plan and a timeline for clearance of dues. The meeting was convened to give comfort to and other service providers as well as apprise them of fundraising plans,” said a source familiar with the development. On their part, the leasing are doing their own risk assessment on whether to continue with leases or consider other steps.

While the airline has been unable to meet payment obligations, it has sought discounts from lessors and other Banks, too, wanted to know if the service providers could support the airline by agreeing to provide fresh capital and by restructuring debt, said another source. A spokesperson for leasing company BOC Aviation declined to comment.

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A public sector banker aware of the talks said working capital support continues. At present, there is no intent to turn off the taps. However, that should not be considered as a basis to carry on with business as usual.

First Published: Wed, January 09 2019. 01:33 IST