MUMBAI: Jet Airways’ board will meet on Thursday to discuss the next possible steps in its fundraising efforts, even as the airline undergoes a forensic investigation directed by its top lender SBI and tries to convince Etihad Airways to invest in it, said two people in the know.
“The board will take stock of the financial restructuring plans and how far it has progressed,” said a person close to the development. “Etihad’s directors too will be there.” Abu Dhabi-based Etihad owns 24% in Jet, India’s second biggest airline by market share.
Jet chairman Naresh Goyal has been trying to get Etihad to put in fresh equity into it, but he wants to retain control in the airline, people close to the development said.
Etihad, however, wants a 49% stake (the maximum shareholding in an Indian carrier allowed to a foreign airline), which means Goyal will be left with a minority shareholding, they said.
Meanwhile, State Bank of India, the main local lender to Jet’s Rs 8,500 crore debt, has appointed EY to conduct a forensic investigation of the airline’s books.
“A forensic audit carries elements that have negative connotations,” a person familiar with the matter said. “It is an audit of money trails and is typically ordered when there is suspicion of fund diversion,” the person said on condition of anonymity.
The forensic investigation means Jet will not get liquidity assistance from SBI or the lender consortium it is leading until the findings of the probe are tabled.
“But SBI is playing a constructive role in this scenario, contrary to what may be the perception,” said the person quoted above.
The ministry of corporate affairs is also investigating alleged irregular financial transactions at Jet.
The airline is grappling with arguably the worst financial crisis of its 25 year existence. It has delayed salaries, laid off staff, grounded planes and pruned unviable flights in a bid to stay afloat until the next cash infusion.