The country's largest lender State Bank of India (SBI) is looking at extending fresh loans to Jet Airways or converting a part of its debt into equity in an attempt to help the stressed carrier get back its financial health, said sources familiar with the matter.
The airline is in constant discussions with the largest public sector bank and the recent forensic audit started by SBI is a step in that direction, sources close to the development told CNBC-TV18, requesting anonymity.
"That (forensic audit) seems to be a rather positive step and possibly, an exercise by SBI whereby, it wants to conduct due diligence before making extending any fresh loans or converting debt to equity," one of the people aware of the development said.
In an exchange filing dated December 17, the Mumbai-based airline had said that as per the directions of SBI, a forensic audit of specific transactions of the company for the period of April 1, 2014, to March 31, 2018, is in progress.
"The company is fully cooperating with the auditors and providing them all the information, as is being sought in this connection," the airline told the exchanges.
The airline also held a board meeting on Thursday to discuss fund-raising plans and CNBC-TV18 has learnt exclusively that soft loans worth $150 million based on guarantees by Etihad have been approved.
"SBI will make a move to help the airline only after the completion of this forensic audit and once soft loans guaranteed by Etihad fly into Jet Airways," a person aware of the development said.
As the moolah comes in from Etihad and discussions with banks progress simultaneously, the airline has also communicated to its pilots that their pending salaries may be paid to them earlier than scheduled on the hopes of incoming help.
The airline, reeling under a debt of over Rs 8,000 crore, had reported a net loss of Rs 1,297.5 crore in the September quarter as compared to a net profit of Rs 49.6 crore in the year-ago period.
As per the banking sources talks of resolution for Jet Airways are in various stages. "While there is no proposal to extend fresh loans as of now, such extension will be part of the resolution plan," they said.
Jet Airways responded to CNBC-TV18's query saying that in line with its policy, it does not comment on speculation. SBI did not respond to the query until the article was published.
First Published: IST