Domestic and foreign lenders of Jet Airways have sought an update on the airlines’ liquidity situation, according to a Mint report.
The move by lenders comes a few days after the airline defaulted on a debt payment to a consortium of banks led by State Bank of India (SBI). As a result, ICRA downgraded the long-term rating of Jet Airways to D from C and revised the short-term rating to D from A4.
The lenders are said to meet Jet Airways’ executives, along with various vendors in coming days, to help the airline renegotiate contracts and revive its poor cash flow position, sources told the paper.
A consortium of banks led by SBI along with vendors, lessors and those providing engineering, spare parts, credit card and airport services are scheduled to meet officials of the cash-strapped airline on January 8, the report said.
Foreign lenders of Jet are expected to meet its executives next week, a source told the paper.
According to a report by Reuters, bankers are being called to the meeting to reassure creditors — domestic as well as overseas — that Jet is working toward securing funding and has a repayment plan which it will share with them.
“Lenders want to ensure that the outstanding dues of lessors and vendors are sorted out to avoid any cancellation of lease contracts,” a senior banker told the paper, adding that lenders may recall a loan, seize assets or slap penalties in case the borrower violates a loan covenant.
The airline has been planning to raise money from the market to repay debt and fund its operations. Jet Airways is said to be close to striking a deal with SBI for a fresh loan of Rs 1,500 crore ($215 million) to meet its working capital needs.