March 15, 2019 / 11:16 AM / 4 months ago

Lenders to Jet to reach final resolution in one week: SBI official

FILE PHOTO: A Jet Airways passenger aircraft prepares to land at the airport in the western Indian city of Ahmedabad August 12, 2013. REUTERS/Amit Dave/File Photo

MUMBAI (Reuters) - A consortium of lenders led by the State Bank of India (SBI) should reach a final resolution plan to rescue embattled Jet Airways in the next one week, an SBI official said on Friday.

Grappling with a debt of more than $1 billion, Jet has delayed payments to banks, lessors, vendors and staff. Lessors have grounded more than three dozen planes, forcing hundreds of flights to be canceled.

All the lenders are working toward a resolution with the “desire that this airline keeps running”, the official said, declining to be named as the matter was sensitive.

Jet, in February, said its board had approved a rescue deal which will make its lenders its largest shareholders as they convert part of their debt into equity and fix a near 85 billion rupee ($1.2 billion) funding gap.

But the plan, which also includes an equity infusion, debt restructuring and the sale and lease back of aircraft, needs approvals from several stakeholders, including major shareholder Etihad Airways.

Newspaper reports bit.ly/2u7QYGE, citing sources, on Friday said Etihad was unlikely to agree to the proposed debt resolution plan because of a disagreement over certain terms of founder Naresh Goyal's shareholding.

Separately, SBI announced the launch of cardless cash withdrawals from its automated teller machines using the bank’s mobile app YONO. This will help minimize debit card-related fraud and theft, the bank said.

Reporting by Suvashree Choudhury, writing by Abhirup Roy, Editing by Himani Sarkar

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