India’s Economic Times is reporting that the Jet Airways revival plan has stalled over promoter Naresh Goyal’s insistence that his shareholding shouldn’t be capped at 22 per cent in “perpetuity”, which was one of Etihad’s conditions for providing funds to the airline. Although Jet hasn’t commented publicly on the issue, media reports are suggesting that Goyal wrote to Etihad group CEO Tony Douglas seeking a waiver on the “perpetuity requirement of capping the promoter shareholding to 22 per cent ”.
The airline needs Rs 750 crore immediately to maintain operations. Any delay to the funding from Etihad jeopardises the restructuring plan. Debtor banks are resistant to Goyal regaining full control of the airline and want reassurances that he will have a non-operational role. According to the agreement, Goyal will step down as chairman and director and cease to hold an executive role. The latest request has caused Etihad to refrain from approving the restructuring plan for Jet, including the release of any funds.
Unconfirmed media reports allege that Jet has defaulted on external commercial borrowings of $140 million provided by HSBC in 2014, for which Etihad Airways is the loan guarantor.