Jet Airways lenders have approved a plan to convert part of their debt into equity with a 49 per cent stake in the airline. State Bank of India (SBI) and Punjab National Bank (PNB) will bring in £50 million as an emergency infusion, subject to other lenders agreeing to the two banks being allowed to take out their money first. Banking sources said lenders do not want to be majority shareholders in the airlines. They have therefore agreed to a debt conversion and to hold equity up to 49 per cent of the airline.
Other lenders will bring in an additional £100 million as part of this plan. This is subject to the airline promoters – Naresh Goyal and Etihad Airlines, bringing in £75 million promoter contribution. Once all involved parties agree, SBI and PNB will release £50 million of emergency funding. Etihad could bring in funds to make up for Goyal's shortfall if the promoter agrees to step down. Emergency financing is crucial to keep Jet's planes in the air and also to re-induct aircraft that have been grounded for want of spares. Of its total fleet of 119, only 70 are operational with lessors taking action every other day. In September 2018, the airline operated 124 planes, of which 16 were owned.
SBI Chairman Rajnish Kumar had said that a resolution plan was being worked out with the lenders of Jet Airways. Kumar said, “An overall comprehensive resolution plan is being worked out. There would be many elements, including conversion of debts of lenders into equity.”