This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Major Indian carrier Jet Airways, on the brink of financial collapse, needs 85 billion rupees ($1.2 billion USD) to claw its way out of debt.

Fortunately for the airline, a bailout seems to be on the horizon — involving the sum of one rupee, or a little more than a US cent.

How? The deal is actually a debt restructuring backed by the State Bank of India in which the bank would acquire a 50.1 percent stake in the airline for the nominal sum of one rupee, by being issued 114 million new shares, Bloomberg says. Jet Airways currently has a negative net worth, and with the debt restructuring it will be able to obtain fresh equity and time to liquidate some unnecessary assets — mostly by dumping aircraft it can’t afford.

“The structure, however, is expected to be temporary, allowing the airline to raise equity from investors, which in turn would alter the shareholding pattern,” Bloomberg explains. “While the bank deal is nominally a conversion of debt into shares, debt levels will come down only by 1 rupee once the exercise is completed.”

The plan still has to be approved by the airline’s lenders, a banking group, Jet Airways’ founder Naresh Goyal and the board of Etihad Airways, the (also financially unstable) Abu Dhabi-based airline that owns a 24 percent stake in Jet Airways.

It’s still unclear who the airline’s new investors would be. Bloomberg reports that Goyal has said he would invest up to 7 billion rupees if he keeps his 25 percent stake, Etihad could invest 14 billion more rupees to keep its 24 percent holding and India’s National Investment and Infrastructure Fund could pump in up to 13 billion rupees. But those possibilities would still leave the carrier about 50 billion rupees in debt.

For India’s government, saving Jet Airways may actually make sense in the short term. As the nation’s largest full-service carrier, the airline employs at least 16,000 people, and with an impending election, the loss of all those jobs might look bad for incumbent prime minister Narendra Modi. Jet Airways used to serve New York JFK, Newark and San Francisco in the US, but has shrunk to only one destination in North America, Toronto.

Featured photo by Artur Widak/NurPhoto via Getty Images.

Know before you go.

News and deals straight to your inbox every day.

The Platinum Card® from American Express

WELCOME OFFER: 60,000 Points Terms Apply.

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: Delta Sky Club and Centurion lounge access, $200 annual airline fee credit and up to $200 in Uber credits annually

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
  • Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
  • 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
  • 5X Membership Rewards points on prepaid hotels booked on amextravel.com.
  • Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
  • $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
  • $550 annual fee.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
N/A
Annual Fee
$550
Balance Transfer Fee
See Terms
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.