Mumbai: Jet AirwaysNSE -1.00 %, which is in the midst of restructuring its operations, has become a standard account for most of the lenders as it has begun meeting payment in the past two months after missing payments in December, said two people familiar with the matter.
The resumption of payments would be a major relief for lenders as they would not be classifying the loan as a non-performing asset (NPA) and that would also let them escape provisioning as per regulatory norms, said t ..
“Jet Airways has become a regular account for most of the lenders,” said one of the persons cited above. “They have begun paying after January which is good enough for us to not to classify it an NPA.”
An account is classified as NPA when the overdue amount stretches beyond 90 days. Though NPA classification happens after 90 days, banks are using the three-month window to help reduce stress for Jet Airways and address the problem early.
India’s biggest airline created a stir in early January after it missed payment of principal and interest in December amid falling cash flow and rising cost of operations. Subsequently, it grounded many of the airplanes as it was not able to pay lessor ..
While banks and the Jet management have been negotiating a turnaround plan for the airline neither of the parties have signed off on a plan that would be implemented, said those people.
Lenders are insisting that the current dominant shareholders – either Naresh Goyal or Etihad – must bring in their portion of equity investments, or at least arrange some other equity investors before agreeing for restructuring debt which is about Rs 8,000 crore.
It has large debt repayments due over December 2018 to March 2019 of Rs 1,700 crore, Rs 2,444.5 crore in financial year 2020 and Rs 2,167.9 crore in 2021. Jet is talking about various liquidity initiatives including equity infu ..
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