After a section of employees floated the proposal to take over management control of the grounded Jet Airways and arrange up to Rs 3,000 crore from external investors, a group of frequent flyers of the cash-strapped airline has approached the key lenders, including State Bank of India, ICICI Bank and Punjab National Bank, to submit the 'Revival of Jet Airways Plan' or 'Roja'.
Claiming to be reputed professionals and minority shareholders in Jet Airways as well as nine banks that have lent money to Jet, the group has proposed a leveraged buy-out plan (LBO) to revive the grounded airline.
The group of professionals, led by Sankaran P. Raghunathan, has given a presentation on the airline's revival plan to various stakeholders, including pilots, engineers, employee unions and bankers.
As per the plan, the employees of Jet Airways would first take control of the company. They will take loan from existing lenders and invest in the company, eventually becoming part-owners.
"The banks can give Rs 1,500 crore loan to the employees. This is six months' salary of each employee as personal loan. The employees will use this money to buy out 51 per cent stake in the company from SBI and 12.5 per cent from Etihad. The balance Rs 200 crore would be given to the company for new shares. This way the employees will control Jet Airways," said the presentation reviewed by IANS.
In the next step, the plan is to raise money involving the frequent flyers.
Accordingly, the banks can be persuaded to give a personal loan to all those who want to buy four tickets each for Rs 10,000 which would be valid for two years. By pre-selling these tickets, as much as Rs 8,000 crore could be raised.
The employees, already in controlling position, would pass a resolution to authorise the additional issue of shares on a preferential basis to all those who buy the ticket packets -- 100 shares each for Rs 150 each -- and thus raise Rs 12,000 crore.
"The Rs 20,000 crore raised will now be used for operational working capital and for repayment to creditors over five years," the presentation said.
Facing severe financial crisis, Jet Airways had on April 17 announced to temporarily suspend its flight operations. The airline continues to be grounded and its revival depends upon fresh fund infusion by the investors.
(Nirbhay Kumar can be contacted at nirbhay.k@ians.in)