Indian jet extends cancellations after lenders fail to release funds | Money



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A Jet Airways plane is parked while another plane is heading for the landing strip at Chhatrapati Shivaji International Airport in Mumbai on February 14, 2018. - Reuters pic
A Jet Airways plane is parked while another plane is heading for the landing strip at Chhatrapati Shivaji International Airport in Mumbai on February 14, 2018. – Reuters pic

MUMBAI, April 16 – The troubled Jet Airways in India appeared to be nearing collapse after lenders made no decision on whether to release critical funds for the debt-laden carrier to continue to fly.

Thousands of passengers have been stranded in recent days after the airline, which has debts of more than one billion dollars (RMB 4.12 billion), canceled all its international flights because it could not pay his bills.

Jet's general manager, Vinay Dube, said in an email to staff yesterday that the cancellation of all international flights was postponed until Thursday because an emergency cash injection had not been made. have been made available.

"As you know, we work with lenders to secure interim financing for our operations. The interim funding has not been obtained so far … "he wrote.

Dube added that Jet 's board of directors would meet today to discuss "next steps".

The airline has more than seven jet planes after creditors have seized dozens of others over the last few weeks.

Pilots, engineers and ground staff who have not been paid for three months have announced their intention to strike if the banks do not inject emergency funds.

They had planned to strike from Monday, but pushed back the action until after the meeting of bankers.

Lenders at the head of the State Bank of India took control of Jet last month by promising to provide "immediate financial support" of US $ 218 million as part of a debt relief plan.

But most funds have not been released and Jet, which now operates a limited service, desperately needs the money or could go bankrupt a few days later, Indian media reported.

The lenders met for several hours yesterday, without reaching an agreement on how to proceed.

SBI said in a statement that "the support needed to facilitate the process (of debt resolution) is being extended by the consortium banks".

"The cooperation and support of all other stakeholders will be key to the success of the process," he added.

Jet has been in free fall for months. All of its international flights have been suspended since Thursday night, with Europe and North America particularly affected.

Hundreds of staff members demonstrated in New Delhi and Mumbai over the weekend demanding to be paid and ask for the rescue of the company.

The Mumbai-based company has defaulted on its credit commitments and repeatedly failed to pay its staff and donors in recent months.

The SBI-led consortium is trying to find a buyer for Jet, which until recently was the second largest airline in terms of market share.

A deadline was passed on Friday for prospective bidders to express their interest in acquiring a 75% stake in the carrier.

Etihad Airways, which owns 24% of the capital, said it wants to acquire a controlling stake of up to 75%, according to media reports.

Naresh Goyal, who founded the airline but resigned as president last month, also submitted a bid, as did several private equity groups, newspapers reported.

The government of Prime Minister Narendra Modi, for whom the collapse of Jet would be a blow when he seeks a second term in a national election, convened a crisis meeting Friday night. – AFP

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