Jet Airways (India) Ltd., which is currently battling a severe financial crisis, has admitted for the first time that the lenders, led by the State Bank of India (SBI), are working on a comprehensive resolution plan for a turnaround of the airline. It also said that changes in the composition of its the board were also being discussed.

Commenting on its delay in the payment of interest and principal instalment due to the consortium of Indian banks led by SBI, Jet Airways said, “SBI, in consultation with the other members of the consortium and the other stakeholders, has been working on a comprehensive resolution plan towards a turnaround of the company for its sustained growth and restoration of financial health.” It said the resolution plan contemplated various options on the debt-equity mix, proportion of equity infusion by various stakeholders and the consequent change in the composition of the company’s board of directors.

“The implementation of the resolution plan, once agreed to and approved by all the stakeholders, including the board of directors of the company, will be subject to receipt of applicable statutory, regulatory, contractual and corporate approvals and consents,” Jet Airways said in a statement to dispel various rumours floating in the market.

“We wish to clarify that the resolution plan is presently under active discussion amongst the stakeholders and the various options therein, being privileged and confidential, are yet to be crystallised and agreed to by the stakeholders in the best interests of the company,” the airline said.

“The company is committed to be in compliance with the applicable laws and will, at the appropriate time, make necessary disclosures and statements in order to ensure transparency and avoid speculations and rumours in respect of the subject matter,” the statement added.

It said as per the stated objective, the company had been working on various cost-cutting measures, debt reduction and funding options, including infusion of capital, monetisation of assets and including the company’s stake in its loyalty programme, in consultation with various key stakeholders.

‘No communication’

Jet Airways denied any communication alleged to have been sent by Etihad Airways PJSC to SBI in relation to the resolution plan for the airline. Kapil Kaul, CEO, South Asia, Centre for Asia Pacific Aviation (CAPA) said, “Jet Airways will emerge stronger [after this exercise].”

Union Civil Aviation Secretary Rajiv Nayan Choubey said, “We hope that the three parties — Jet Airways, Etihad Airways and lenders — come together and decide on a common plan.”

“The Jet Airways debt default issue is being discussed among promoters and lenders. Government has no direct role in this. The Ministry has not applied its mind on recommending any waiver,” he added. After two days of sharp gains, Jet Airways shares slumped 8% on Wednesday to ₹271 on the BSE.