India’s Prime Minister Narendra Modi rode to power five years ago on his business friendly credentials and the promise of generating millions of jobs. Now an airline is on the verge of collapse, bringing Modi’s image under attack just months before national elections, Bloomberg News reported. Struggling in a competitive market where basic air fares can get as low as 2 cents, Jet Airways India Ltd., the country’s second-biggest airline, has piled on $1.1 billion in debt and failed to pay loans and salaries.

Errant debtors are forever looking for ways to undermine creditor protection; but when lenders themselves start making a mockery of a fledgling insolvency law, nobody can save it, a Bloomberg View reported. That’s where India’s two-year-old bankruptcy regime is today, brought to the brink of irrelevance by the strain of resolving its most high-profile case: Essar Steel India Ltd. The billionaire Ruia brothers have used every trick in the book to ensure their prized asset stays in the family, despite owing financial creditors 508 billion rupees ($6.3 billion) in unpaid dues.

In a related story, Reuters reported that Etihad Airways has offered to invest in debt-laden Indian carrier Jet Airways Ltd at 150 rupees ($2.11) per share, along with an immediate release of $35 million after certain conditions are met, CNBC-TV18 reported here on Wednesday, citing sources. The offer comes at a staggering 49 percent discount to Jet’s closing price of 293.70 rupees on Tuesday. Jet Airways shares tumbled after the report, falling as much as 7.5 percent to 271.75 rupees in their biggest intraday percentage loss since Dec. 10, 2018.

Jet Airways India Ltd. is working with lenders to revamp its debt as the struggling carrier tries to shore up its financials after recording losses in nine of the past eleven years in a market known for ultra-low fares, Bloomberg News reported. The carrier is working on “various options on the debt-equity mix, proportion of equity infusion,” the Mumbai-based company said in a statement on Wednesday. Among options considered by the lenders led by State Bank of India Ltd.

Shares in Jet Airways, the troubled Indian airline, jumped nearly 16 per cent on Monday after local media reported that it was poised to agree on a resolution plan this week, with shareholder Etihad Airways pumping in new capital, the Financial Times reported. Jet has been locked in financial crisis for months, after a jump in oil prices last year further weakened a business already strained by intense competition from Indian budget airlines.

Less than a month before India’s budget, risks are growing that Prime Minister Narendra Modi’s government will miss fiscal targets for a second year in a row as it gives into populist pressures before a high-stakes election, Bloomberg News reported. Speculation is mounting of possible cash handouts to farmers and tax exemptions to shore up voter support ahead of polls due by May. Modi’s Bharatiya Janata Party lost control of key states in provincial elections last month. Economists at Nirmal Bang Equities Pvt. and Kotak Securities Ltd.

Jet Airways India Ltd. is running out of money, forcing it to weigh re-starting bailout talks with Tata Group, the nation’s biggest conglomerate, according to people with knowledge of the matter. While its founder and Chairman Naresh Goyal has been discussing a deal with Etihad Airways PJSC, talks with the foreign partner stalled over the latter’s demand that Goyal step aside from his management role, the people said, asking not to be identified as the discussions are private, Bloomberg News reported.

Lenders have proposed a turnaround plan for Jet Airways (India) Ltd, news reports suggest. According to a Mint report, local lenders to the troubled airline have proposed a $900 million resolution plan, comprising fresh equity infusion and restructuring of $450 million of its loans, Livemint.com reported. Business Standard reported that State Bank of India Ltd could possibly consider converting its debt into equity. Sure, conversion of debt to equity will bring some relief on interest costs, although it remains to be seen how much equity dilution that may entail.

A financial creditor can seek to first initiate insolvency proceedings against a corporate guarantor of a company, instead of the company itself, in case the guarantee fails, the National Company Law Appellate Tribunal (NCLAT) has held, Business Standard reported. The corporate insolvency resolution process, thus, can go ahead against the guarantor under Section 7 of the Insolvency and Bankruptcy Code (IBC), even without having proceeded with and exhausted all legal remedies against the principal debtor, it has said.

India’s heavily indebted Infrastructure Leasing & Financial Services (IL&FS) said on Wednesday it has received more than 30 expressions of interest for IL&FS Transportation Networks Ltd’s (ITNL) domestic road business, Reuters reported. “Interest has been received from a mix of strategic and financial players,” IL&FS said in a statement. ITNL is the biggest subsidiary of IL&FS and manages some of the group’s most valuable assets such as road projects.