Jet Airways shares crashed 5.07% to 217.4; may crash further.
Jet’s partner, Etihad Airways PJSC, leaves Jet in the lurch.
Etihad is looking for buyers who can buy its 24 percent stake in Jet Airways Ltd.
This may allow Jet’s lenders to decide on their future course of action. After a meeting between Etihad Ariways’ Chief Executive Officer Tony Douglas and State Bank of India Chairman Rajnish Kumar, the Abu Dhabi-based airline has stated that it will not participate in the resolution plan.
…..Another bad news for Jet Airways.
Previous negotiations with Jet Airways promoter Naresh Goyal to bring in more funds remained inconclusive. Etihad’s stance makes the situation more grim for the Company. The message which now goes in the market is : ‘If Jet’s own partner does not puts in money, how can an outsider be expected to invest in Jet?’
As March 31 comes closer, Banks will be forced to classify Jet Airways as a non-performing asset (NPA). It would have then completed 90 days without paying its dues. As per the income recognition and asset classification guidelines, banks will have to provide for at least 15 percent of the loan after the account becomes an NPA. Lenders have time till June-end to implement a resolution plan in Jet Airways. In short, a 25 year old Company has started to stare at Insolvency & Bankruptcy Codes.
Jet Airways has grounded another six aircraft, raising the number of grounded aircraft to at least 48 for defaults on lease payments.
In a 19 March stock exchange disclosure, Jet says one of the six aircraft is operated by its subsidiary Jet Lite. Prior to this groundings have been concentrated on Jet Airways.
The airline’s latest round of groundings forced India’s aviation minister Suresh Prabhu to convene an emergency meeting.
In a series of tweets, he had directed his ministry’s secretary and the country’s directorate general of civil aviation (DGCA) to hold a meeting to assess the grounding’s impact on “advance bookings, cancellation, refunds and safety issues, if any.” He has called for an immediate report from the DGCA related to Jet compliance issues.
He also tweeted a ministerial statement, noting that Jet Airways now has 41 aircraft in service, and is operating 603 domestic flights and 382 international flights. In that statement, he warned that “it is a dynamic situation and there may be further attrition in coming weeks.”
The beleaguered carrier issued this in relation to its business: “The company is also making all efforts to minimise disruption to its network due to the above and is proactively informing and re-accommodating its affected guests. The company also continues to provide required and periodic updates to the Directorate General of Civil Aviation in this regard.”