Jet Airways bid drill delayed
The expression of interest for Jet Airways’ stake sale has been delayed as the legal aspect of the bidding document and other issues involved are being vetted, a senior SBI official said.
The consortium of lenders led by the SBI was slated to come out with the document on Saturday. “Legal team is vetting the expression of interest (EoI) and would be issued soon after getting the requisite clearance,” the official said.
The SBI, after a series of meetings with airline officials and the ministry, had announced that the bids would be called on April 6 and the bidding window would remain open till April 9.
There has been speculation on the likely bidders for the debt-laden airline, which has significant domestic and international routes. Among the likely bidders are Tata Vistara, Delta Airlines, Etihad Airways and investment firms such as TPG and NIIF.
The SBI had said in a statement that it “intends to invite expressions of interest... on April 6 and will need to be submitted by April 9.” The SBI had said that it “intends to pursue the bank-led resolution plan for sale of stake in the company in a time-bound manner”.
“Whilst all efforts will be made for the stake sale by the lenders, other options may be considered by the lenders should these efforts not result in an acceptable outcome,” the statement said.
The statement did not explain what other options the lenders had in mind, but taking Jet Airways to bankruptcy court seems a logical one.
The consortium of lenders had agreed to put in Rs 1,500 crore funding by acquiring a 51 per cent stake in the company through the issue of Rs 11.4 crore fresh shares. This resulted in the stake of promoter Naresh Goyal coming down to 25 per cent from 51 per cent, while the holding of Abu Dhabi’s Etihad Airways, which had a 24 per cent stake in the carrier, came down to 12 per cent.
Jet Airways has been struggling with cash flows for the past six months because of rising fuel costs and intense competition. It has even delayed payment to lessors, airport operators and oil marketing companies, besides a part of its workforce, to keep the company running. The airline owes over Rs 8,000 crore to the SBI-led lenders consortium.
The lessors of the airline have been approaching the DGCA for grounding of more aircraft, which could further bring down the number of planes in operation.