Contact Your Financial Adviser Money Making MC
29
January 2019
 |
SBI
(The Total Investment & Insurance Solutions)
Jet Airways creditor State
Bank of India is likely to own 15 percent of the airline if the cash-strapped
carrier’s plan for a debt-for-equity swap is approved, Indian TV channels
reported on Tuesday. The Total Investment & Insurance Solutions
With debts of about $1.14 billion, Jet has
been hit by fierce competition from other low-cost carriers, a rupee
depreciation and high oil prices. It owes money to banks, pilots, vendors and
lessors, some of whom are considering taking back aircraft, sources have told
Reuters.
Jet said on Monday it would seek shareholder
approval next month to convert debt into equity, increase its share capital and
allow lenders to nominate a director on its board to help resolve its financial
problems.
Its lenders, including SBI, could end up
owning as much as 30 percent while shareholder Etihad Airways could see its
stake rise to more than 40 percent from 24 percent if it injects more equity in
the Indian carrier, TV channels reported.
The airline’s founder and chairman Naresh
Goyal is likely to see his stake cut to below 20 percent from 51 percent.
Jet, which controls a sixth of India’s
booming aviation market, did not respond to a request comment, while SBI and
Etihad also did not reply to emails seeking a response.
Indian banks in 2010 undertook a similar debt
for equity swap to try and save Kingfisher Airlines, founded by liquor baron
Vijay Mallya, and ended up owning nearly a quarter of the airline, before
losing out when it was eventually grounded.
Jet defaulted on a debt payment to a
consortium of Indian banks, lead by SBI, this month, prompting a downgrade by
ratings agency ICRA. The airline has to make large debt repayments over the
next few years, starting with about 17 billion rupees ($242 million) by the end
of March, ICRA said on Jan. 2.
No comments:
Post a Comment