MUMBAI: India's embattled Jet Airways is set to temporarily halt operations from Wednesday (Apr 17) onward after its lenders rejected the airline's plea for emergency funds, three sources from inside the company said.
The airline, saddled with roughly US$1.2 billion of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about US$217 million from its lenders, as part of a rescue deal agreed in late March.
Separately, two sources at state-run banks told Reuters on Wednesday that the lenders had rejected the 4 billion rupees (US$58 million) that Jet had sought to keep itself temporarily afloat, while its lenders attempted to identify an investor willing to acquire a majority stake in the airline and attempt to turn it around.
"Bankers did not want to go for a piecemeal approach which would keep the carrier flying for a few days and then again risk having Jet come back for more interim funding," said one of the bank sources directly involved in Jet's debt resolution process.
All five sources declined to be named as they have not been authorized to discuss the matter with media.
Jet and its lead lender State Bank of India (SBI) did not immediately respond to requests for comment.