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Jet Airways India Ltd.’s lenders invited initial bids to buy as much as 75 percent of the debt-laden carrier, starting a process that will determine the future of India’s oldest surviving private airline.Potential buyers must submit their interest by April 10, State Bank of India Ltd., the lead creditor, said in a document Monday. A strategic bidder should have a net worth of at least Rs 1,000 crore ($144 million) in the preceding financial year, or at least three years of experience in the airline business.
The airline is credited with successfully breaking the monopoly of state-run Air India Ltd. and was once India’s second-biggest carrier, but its fleet has dwindled to 26 planes from 124 as recently as January. Accumulated losses in nine of the past 11 years have caused Jet Airways to delay payments to banks, lessors and employees, while its founder Naresh Goyal was forced to cede control of the carrier.
Jet Airways, part-owned by Abu Dhabi’s Etihad Airways PJSC, needs Rs 8500 crore to get back on its feet after a fare war by budget airlines wiped out profits and it racked up debt of more than $1 billion.
The fate of Jet Airways is crucial to the legacy of Indian Prime Minister Narendra Modi as he faces an election that begins April 11 after holding power for the last five years. While he remains the favorite in the polls, his party has faced setbacks of late and he has been criticized for not living up to a key election promise to create 10 million new jobs a year. A collapse of Jet Airways, with 23,000 employees, could further dent his credentials.
Consortiums submitting bids should have no more than three members, with each holding a share of no less than 15 percent, according to Monday’s document.
After qualified bidders are selected, they will be provided access to the company’s data and the bid document...Read More
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