Jet Airways shares fall 8% on reports of temporary shutdown

Darnell Taylor
April 17, 2019

Jet management has informed the board that lenders are still divided on the issue of interim funding, the sources said requesting anonymity. With lenders to Jet, unwilling to pump in the promised Rs.1500 cr., which they had said that they would do; the airline is now heading to an imminent closure.

India's Jet Airways Ltd will be forced to shut down as soon as Wednesday if it does not get emergency funding from its lenders, two sources familiar with the matter said on Tuesday. Some of the airlines are also in discussions with lessors to take deregistered aircraft of Jet Airways.

Jet Airways is grappling with acute financial crunch and is operating less than 10 planes besides temporarily suspending global operations.

On Monday, lenders did not take a final decision on providing emergency funds to the cash-strapped carrier.

Representatives of various lenders to Jet Airways are also understood to have discussed issues related to Jet Airways with Financial Services Secretary Rajiv Kumar.

With Goyal opting out, the airliner is likely to shut down operations temporarily.

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Last month, Goyal and his wife Anita Goyal stepped down from the board of the airline, which has more than Rs 8,000 crore debt.

The board of the full service carrier, which is now operating less than 10 aircraft, is meeting in Mumbai on April 16.

The board has asked CEO Vinay Dube to engage with lenders on interim funding for one last time, sources said, adding that Dube has been authorised by the board to announce complete halting of operations by evening if lenders do not agree to release the funding.

These include private equity firms TPG Capital and Indigo Partners, Indian sovereign wealth fund National Investment and Infrastructure Fund (NIIF), and the UAE's Etihad Airways, which already owns a minority stake in Jet, it said.

In his message to employees, Dube said the airline has been working with lenders to secure interim funding for its operations.

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