A consortium of Indian banks, including State Bank of India (SBI), has proposed a turnaround plan for Jet Airways involving new capital infusion and a $450 million loan restructuring, reports Mint.

“While the finer details are still being worked upon, the broader contours entail that Naresh Goyal and Etihad will together infuse $450 million in the company, while the Indian lenders will restructure another $450 million of the airline’s debt, which is up for maturity between now and March this year,” the story quoted a source.

If all the stakeholders approve this debt resolution plan, Naresh Goyal’s (founder and chairman) stake could fall below the current 51 per cent. Another major shareholder in the airline is Etihad Airways, which currently holds a 24 per cent stake.

This turnaround proposal from the banks comes days after the Mumbai-based airline defaulted on its loan repayments on 2 January 2019.

Another Kingfisher-in-the-making?

Jet Airways has been saddled with over Rs Rs 8,620 crore of debt as on 30 June 2018. It also reported its second consecutive quarterly loss of over Rs 1,300 crore last year.

Such precarious finances placed the airline in a similar position to that of Kingfisher airlines in 2011.

To tide over its financial difficulties, the company has been scouting for an investor for fresh capital infusion in the past few months. It has also been reported that Jet was in talks to raise new debt of Rs 1,500 crore from SBI to meet its working capital requirements and certain payment obligations.

Also Read: Why Jet Airways Second Quarter Results Are Indicative Of A Crunch In Domestic Aviation