Jet lenders make last push to find investors to pick up stake in airline

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Etihad Airways’ conditional offer to be a minority stakeholder in Jet Airways has thrown lenders into a tizzy. With little signs of any investor willing to buy 76 per cent, the lenders’ consortium led by State Bank of India has now initiated a process to find investors who could hold small stakes along with Etihad.

The lenders are of the opinion that the ownership of Jet Airways can be divided between three entities, each holding 20 per cent, while Etihad could keep 24 per cent. If the lenders fail to find such investors in the next few days, the only option would be to take the airline to an NCLT-led insolvency process, a source in the know said.

Sources pegged the total investment required by Jet Airways to restart operations at Rs 5,950 crore. Etihad, in its offer, said it would be able to invest only Rs 1,700 crore and acquire only 24 per cent stake. “The total equity need has been assessed at Rs 5,950 crore, of which Rs 1,700 crore can come from Etihad.

“If another three investors can pick up 20 per cent each, a resolution can be possible. But I reiterate that the situation seems to be extremely difficult,” a senior bank executive said. SBI Caps has been told to reach out to prospective investors including companies which have submitted unsolicited bid, another source in a public sector bank pointed out.

“There are quite a few interested parties who have evinced interest to invest in the company. Etihad’s bid to acquire 24 per cent can form the basis for guidance and can be treated as some sort of a floor for other investors,” he said. However, the authenticity of the bids needs to be checked before taking a decision, sources close to the development said.


 “The situation looks to be extremely difficult with Etihad unwilling to relax its conditions.

Jet, once India's biggest carrier, fights to keep flying

Company News

Jet Airways India Ltd.’s fleet has shrunk by almost 90 per cent as the cash-strapped airline struggles to find funds to operate, forcing the nation’s oldest surviving private airline to drastically curtail its scheduled flights amid a hunt for a new investor.

The carrier, once India’s biggest by market capitalisation, was forced to ground 10 more jets after it failed to pay lease rentals on time, Jet said in a stock exchange filing Thursday. That means the carrier is now operating fewer than 20 planes, compared with a fleet of 124 as recently as January.
Jet Airways, which broke into the monopoly of state-run Air India Ltd. in the early 1990s, had successfully managed to hold its own in a tough market before a slew of budget airlines started offering ultra-low fares about a decade back. The airline has since lost market share, piled up a debt load of more than $1 billion, and fallen behind payments to banks, staff and leasing companies.

The company suspended the traditionally lucrative, west-bound, long-haul international flights until Friday morning, a spokeswoman said late on Thursday. It had already stopped operations to several domestic and overseas destinations including Singapore. The spokeswoman didn’t respond to a call and a text message on Friday.


 Jet Airways’ creditors have extended a deadline for potential buyers to declare their interest in purchasing a controlling stake until Friday evening. Finding a buyer for Jet Airways is crucial to the legacy of Indian Prime Minister Narendra Modi as he faces an election that began April 11 after holding power for five years.India’s aviation minister Suresh Prabhu has asked the top bureaucrat in his ministry to review issues related to the airline and take necessary steps to minimize passenger inconvenience and ensure safety, according to a Twitter post.