business

Jet Airways seeks Rs 750 crore bailout from Etihad Airways

Naresh Goyal, chairman of Jet Airways, has sought Rs 750 crore as emergency help from its colleague airlines Etihad Airway. For this, he wrote a letter to Etihad saying that Jet Airways will be closed if not helped. Giving an example of facing the company’s huge cash crunch, he said that the condition of the company is ‘very uncertain’. It is to be noted that due to non-payment of lease rent, the company has had to ground more than 50 planes.

In a letter to Etihad Group Chief Executive Tony Douglas, Goyal said that for interim fund raising, he has also got approval from the Ministry of Aviation for pledging his shares in Jet Privilege. Jet’s share in this loyalty program is 49.9 percent, while majority of stake is of Etihad. Etihad has a 24 percent stake in Jet in April 2014. The company will discuss the solution of Jet during its board meeting on Monday in Abu Dhabi. Goyal said in a letter dated March 8, “I expect your support to save this airline with a capital investment of Rs 750 crore immediately in the next week.”

Earlier on February 14, the board of Jet Airways gave green signal to the plan to restructure the debt on the company. After this, the lending bank will become the largest shareholder in the company because the loan given to the company will be converted into a share at a minimum price of one rupee. Shareholders also approved this restructuring plan on February 21. He warned that if this interim help was not done then it would not be better for the airline’s future and the company would be closed.

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