Jet Airways crisis deepens, management to make last-ditch attempt to secure funding

The board, however, advised the management to make one final attempt to engage with lenders to seek some funding to be able to sustain operations, sources, who did not want to be named, pointed. Further, the sources added that the board authorised Dube to negotiate the terms of interim funding with banks, and if their stance does not change, then stop all operations by the end of the day.

Reacting to the news, Jet Airways clarified that while its operations have been severely affected due to the critical liquidity position, the company is awaiting emergency liquidity support from the consortium of the domestic lenders. "The company's leadership, in consultation with its Board of Directors, is engaged with lenders in connection with the said emergency funding request to arrest the further deterioration of its services and minimise inconvenience to its guests," the airline told exchanges.

In a letter to the staff on Monday, Dube had said, “We have been working with the lenders to secure interim funding for our operations. The interim funding has not been forthcoming thus far, and as a result of this we have extended cancellation of international operations through Thursday, April 18.”

Banking sources had earlier told CNBC-TV18 that the banks have sought RBI directions on the debt to equity conversion after the Supreme Court circular was scrapped, and they also want to weigh the seriousness of bids received before deciding on interim funding.

Meanwhile, even as lenders shortlist potential bidders after verifying their qualifications, sources told CNBC-TV18 that two bidders have already withdrawn their bids for Jet. The Naresh Goyal-led consortium, which had submitted a last minute Expression of Interest on April 12, has now withdrawn from the race, as some of the other bidders including Etihad Airways had raised concerns about his participation and threatened to walk out if his bid was not withdrawn, the sources added. Redcliffe Capital-ThinkEquity consortium has also now backed out of bidding for Jet Airways, as it felt the debt may not be sustainable even after a turnaround, the sources told CNBC-TV18.

This leaves Etihad Airways, National Investment & Infrastructure Fund, TPG Capital and Indigo Partners in the fray to acquire a stake in Jet Airways and banks are set to invite bids from the shortlisted candidates as early as today.