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Wednesday, 13 March, 2019, 12 : 00 PM [IST]

Etihad keeps interim funding plan on hold

Jet Airways grounds four more planes
Etihad Airways has kept the Jet Airways rescue plan on hold even after a memorandum of understanding (MoU) between the two partners, it is learnt. In an indication that hurdles remain before the lenders-led resolution plan can be executed, the Etihad board did not take a decision on the proposed deal, especially on interim funding, in a meeting on March 11, sources in the know said. 

Naresh Goyal , Founder-Chairman, Jet Airways, in a recent communication to Tony Douglas, Group CEO, Etihad had made it clear that the Abu Dhabi-based carrier must infuse INR 750 crore urgently as planes were getting grounded and dues to lessors and staff were pending.

A company executive said in the absence of Etihad board approval to the resolution plan, the clock was ticking for Jet Airways. On March 12, four more Jet planes were grounded due to non-payment to lessors, increasing the count of the grounded planes to 54.

According to lenders, who have steered a rescue plan for Jet, there has been no communication from Etihad Airways on whether it would pay the proposed INR 750 crore as its share of interim financing to keep the airline going. Etihad is learnt to have discussed the matter, along with the bank-led resolution plan, in its board meeting on March 11, but a decision is pending. A senior bank executive said there were indications that Etihad might ask for more time to arrive at a decision on interim funding.

According to lenders, the board meeting of Etihad was inconclusive on investing in Jet the way it was stipulated in the draft resolution plan. Goyal wants Etihad to match the contribution of the lenders in the interim finance plan. 

An Etihad spokesperson, when asked whether the decision on the resolution plan had been deferred, said the airline would not comment on any rumour or speculation. The spokesperson refused to either confirm or deny anything. Jet Airways did not respond to an email query.

(Source: Business Standard)

 
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