India’s debt-stricken Jet Airways halted all of its operations Wednesday after failing to secure emergency funding from lenders, leaving it teetering on the edge of bankruptcy.
The airline, saddled with roughly $1.2bn of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about $217m 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 4bn rupees ($58m) 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 authorised to discuss the matter with media.
Jet and its lead lender State Bank of India (SBI) did not immediately respond to requests for comment.