Etihad Airways Submits Binding Bid For Jet Airways
Deadline to submit bids for Jet Airways closed on May 10.
Etihad Airways PJSC has submitted a binding bid for Jet Airways (India) Ltd. under a sale process being conducted by State Bank of India. In addition, Jet Airways also received three unsolicited bids, including one from its employees, said a person directly familiar with the matter.
The deadline to submit bids ended on Friday. The lending consortium for Jet Airways will now meet in the coming week to discuss the bids received.
Etihad Airways already owns 24 percent stake in Jet Airways and had previously pulled out of a restructuring plan since the lending consortium did not approve the conditions it has placed. It has, however, now decided to submit binding bids. The terms of its bid are not known.
In an emailed response to BloombergQuint, Etihad Airways confirmed that it has submitted a bid for Jet Airways. But it said the Abu Dhabi-based airline cannot be expected to do most of the heavy-lifting.
Etihad Airways re-emphasises that it cannot be expected to be the sole investor, and that, among other requirements, additional suitable investors would need to provide the majority of Jet Airways’ required recapitalisation.Etihad Airways spokesperson
Other shortlisted bidders, including TPG Capital, Indigo Partners and National Infrastructure Investment Fund, did not submit binding bids on Friday.
According to the person quoted above, three unsolicited bids were also received which have not been opened yet. This includes one from a group of Jet Airways employees. Jason Unsworth, a U.K.-based entrepreneur, and Adi Group, a U.K.-based investment firm, have also submitted their unsolicited bids for the airline.
SBI Chairman Rajnish Kumar declined to comment on the specifics of the bid. Speaking on the sidelines of the bank’s earnings press conference, Kumar told reporters that the bank will take a legal view on how to proceed with the unsolicited bids since these bidders had not submitted expressions of interest last month.
Jet Airways was grounded on April 17 after it failed to repay its employees and lessors. It was also not able to secure Rs 1,500 crore in emergency financing, which was part of a resolution plan being implemented by the banks. Out of funds, the airline could not continue its flight operations. The Ministry of Civil Aviation as well as the Directorate General of Civil Aviation then decided that the slots alloted to Jet Airways across Indian airports would be temporarily reallocated to other airlines to manage passenger traffic.
Jet Airways owes more than Rs 10,000 crore to its lenders, which it has not paid since Dec. 31. SBI and Punjab National Bank are the two main lenders for the airline, with exposures of nearly Rs 2,000 crore each. While announcing the bank's quarterly results on Friday, SBI disclosed that it had downgraded Rs 1,220 crore worth loans to Jet Airways as non-performing category.