Debt-laden Jet Airways likely to temporarily shut down its operations as the lenders failed to approve emergency fundings, sources familiar with the matter told CNBC-TV18. Jet Airways' board met on Tuesday to chalk out the future course of action after the airline failed to get emergency funding from lenders.
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. Jet management has informed the board that lenders are still divided on the issue of interim funding, the sources said requesting anonymity.
Reacting to the news, Jet Airways clarified that while its operations have been severely affected due to the critical liquidity position, the company is awaiting emergency liquidity support from the consortium of the domestic lenders.
"The company's leadership, in consultation with its Board of Directors, is engaged with lenders in connection with the said emergency funding request to arrest the further deterioration of its services and minimise inconvenience to its guests," the airline told exchanges.
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The airline, which has been expecting Rs 1,500 crore interim funding from lenders, has failed to get that despite several meetings. The latest meeting with lenders on Monday too remained inconclusive.
With the delay in fund infusion, Jet's operations have been shrinking. The airline's fleet has shrunk to seven aircraft from 119, a few months back.
Meanwhile, multiple banking sources told CNBC-TV18 that the lenders to Jet Airways will meet Tuesday to finalise binding bids for the cash-strapped airline.
Only the shortlisted candidates will be allowed to bid, said the sources on condition of anonymity. The legal verification of expression of interests will be completed this afternoon, the sources added.
Jet Airways has more than Rs 8,000 crore in debt and is looking for urgent liquidity infusion to pay its pilots, engineers and make payments to its lessors.
The airline's CEO Vinay Dube on Monday wrote to staff saying the management would seek guidance from the board on the next steps.
In his message to employees, Dube said the airline has been working with lenders to secure interim funding for its operations. "The interim funding has not been forthcoming thus far and as a result of which we have extended cancellation of international operations through Thursday, April 19," he wrote. "We will keep you updated on all critical developments," he added.
At 01:00 PM, the stock was trading 17 percent lower at Rs 218.10 per share on the NSE.