Billionaire Hinduja Brothers Preparing Bid For Jet Air
(Bloomberg) -- The Hinduja Group is preparing a bid to buy grounded carrier Jet Airways India Ltd., according to people familiar with the matter.
The U.K.-based group, run by brothers Gopichand Hinduja and Ashok Hinduja, plans to submit an expression of interest by the Jan. 15 deadline, signaling its intent to make a formal offer, the people said, asking not to be identified as the discussions are private. Hinduja is seeking a partner to bid, one of the people said.
Shares of Jet Airways jumped as much as 6.9% in early Tuesday trading in Mumbai. The stock has plunged almost 90% this year, giving it a market value of about 3.3 billion rupees ($46 million).
Creditors are seeking fresh bids for Jet Airways after earlier getting interest from only a single company, Synergy Group Corp. The Mumbai-based airline, which was once the country’s largest by market value, fell victim to a cut-throat price war initiated by a slew of budget carriers and eventually defaulted to banks, staff and lessors.
State Bank of India and Punjab National Bank have claimed 82.3 billion rupees, while other creditors, like employees and lessors, are seeking 64 billion rupees from the airline, which is 24% owned by Abu Dhabi’s Etihad Airways PJSC.
Hinduja Group had earlier this year considered bidding for Jet Airways in partnership with Etihad, but Etihad jettisoned the proposal and Jet Airways was tipped into bankruptcy. Gopichand Hinduja told the Mint newspaper this month that the group was open to buying Jet Airways if indemnified from the airline’s legal liabilities.
Deliberations are at early stage and Hinduja Group may decide against bidding, or other bidders may emerge, the people said. The Hinduja Group didn’t immediately respond to requests for comment.
While preparing a bid, the Hinduja Group will grapple with the complexities that have sapped Jet’s value, including lapsed landing rights at Heathrow airport, and the validity of the carrier’s now defunct flying slots.
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