India’s SBI says lenders in talks for Jet Airways’ restructuring plan

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(Reuters) – State Bank of India (SBI) (SBI.NS) said on Thursday lenders of Jet Airways Ltd (JET.NS) were considering a plan to resolve the debt issues of the Indian carrier, amid increasing prospects of a bailout by major shareholder Etihad Airways.

Jet said on Wednesday a resolution plan, currently being discussed with stakeholders, contemplates options on the debt-equity mix, proportion of equity infusion by stakeholders and change in the airline’s board.

“SBI would like to state that lenders are considering a restructuring plan under the RBI framework for resolution of stressed assets that would ensure a long-term viability of the company,” the state-owned bank said in a statement.

Statements from Jet and its biggest lender SBI come after CNBC-TV 18 reported on Wednesday that Etihad had offered to buy Jet shares at a 49 percent discount and immediately release $35 million to bail out the troubled carrier, citing a letter to SBI from the Abu Dhabi airline’s CEO Tony Douglas.

Jet’s shares were down 3.7 percent on Thursday morning, having plunged over 8 percent in the previous session after the report.

Etihad also wants Jet’s founder and Chairman Naresh Goyal to step down from the board and his stake to be slashed to 22 percent from 51 percent, CNBC-TV 18 reported.

However, India’s civil aviation secretary, R N Choubey, told reporters on the sidelines of a conference on Wednesday that control of Jet would need to remain in domestic hands.

Reporting by Tanvi Mehta in Bengaluru; Editing by Gopakumar Warrier

Our Standards:The Thomson Reuters Trust Principles.

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