Etihad Group CEO Tony Douglas, in an email to State Bank of India (SBI), said his airline will invest in struggling Indian carrier Jet Airways only at Rs 150 per share.
Shares of Jet Airways fell 6.20 percent in trade on Wednesday morning and were trading at Rs 274.15 per share at 0953 hours.
Douglas, in his email, said the airline wants an exemption from Sebi on preferential pricing and open offer guidelines in order to invest more money in Jet Airways for its bailout. He categorically denied pledging additional shares to raise debt for capital infusion. Jet has to make large debt repayments to a consortium of Indian banks, led by SBI.
Douglas said Etihad is in constant touch with Sebi on the matter and wants its written permission on exemptions sought. In the letter, Douglas said current situation of Jet Airways is "precarious" and the airline needs emergency funding. It further warned of the imminent risk of lessors grounding aircraft.
Douglas said Jet Airways will not be able to continue funding its operation beyond the current week and Etihad is willing to immediately release $35 million if their conditions are met.Etihad, in the letter to SBI, said debt extended to Naresh Goyal and related parties should not be converted to equity and bankers must insist on a moratorium on this debt. The airline insisted that Goyal must step down from the board with stake restricted to 22 percent from the current 51 percent.
On January 14, CNBC-TV18 reported Jet Airways' chairman Naresh Goyal is likely to step down this week and lenders meet to finalise resolution plan for the airline.
As per ICRA's report, Jet Airways has large repayments due until March to the tune of Rs 1,700 crores and further Rs 2,445 crore by FY20 and Rs 2,168 crore by FY21. The airline said recently it had defaulted on a debt payment to bankers.
Under Reserve Bank of India's (RBI) February 12 circular, banks will have to approve a resolution plan for the company within 180 days starting the first day of delay in payment, which is January 1, 2019 in the case of Jet Airways, failing which the company will have to be sent to the bankruptcy court under Insolvency and Bankruptcy Code (IBC).
First Published: IST