A Jet Airways India Ltd. aircraft passes over traffic as it prepares to land at Chhatrapati Shivaji International Airport in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Etihad, Five Other Investors Express Early Interest In Jet Airways

At least six investors have expressed early interest in the beleaguered Jet Airways (India) Ltd. as the deadline ended today, according to two people in the know.

Existing investor Etihad Airways PJSC, TPG Capital, a consortium of Redcliffe Capital and Think Equity, Indigo Partners and National Infrastructure Investment Fund have submitted their expressions of interest to SBI Capital Markets Ltd., the people said on the condition of anonymity as the information is private. BloombergQuint was not able to confirm the name of the sixth bidder.

Jet Airways promoter Naresh Goyal didn’t submit a formal interest today. Goyal, on Thursday, pledged 26 percent stake in the airline to Punjab National Bank. That will help banks to extend loans worth Rs 1,500 crore to the debt-laden airline to pay its vendors, employees and lessors.

The interested investors will have access to financial information in Jet Airways, which will help them conduct due diligence and finalise a bid. The final bids, according to the EoI document with State Bank of India and SBI Capital, will have to be submitted by April 30.

While NIIF was not required to submit a formal interest, it sought the bid document from SBI Capital to evaluate an investment opportunity, the people said.

TPG Capital, IndiGo Partners and Etihad Airways declined to comment to BloombergQuint’s queries. Redcliffe Capital and NIIF have yet to respond.

Still, expressions of interest do not guarantee that the investors would submit final bids, the people quoted earlier said. The potential investors were informed on Thursday that Jet Airways had only six functional planes. Moreover, the airline stands at the risk of losing its slots at various airports in India. Without these key resources, the people said, they might find it difficult to turn around the airline.

Civil Aviation Secretary Pradeep Singh Kharola today told reporters the airline will be flying six or seven planes on Saturday and 40 flights a day over the weekend. Jet Airways is also expected to seek interim financing from lenders on Monday, he said.

The process to seek initial interest for Jet Airways—initiated on April 8—was to originally end on April 10. SBI Capital, on behalf of the airline’s lending consortium, however, extended it by another two days to encourage further participation.

The deadline was extended to accommodate Etihad Airways, which submitted its interest on Thursday, one of the two persons quoted earlier said.

Jet Airways is in dire need of funds as non-payment to lessors has led to grounding of planes. The airline also suspended international flights till April 15. Meanwhile, the pilots employed by Jet Airways have threatened legal action if they are not paid salaries pending for months.

The airline has a debt of around Rs 10,000 crore, with SBI and PNB having exposures worth Rs 2,000 crore each. On Jan. 1, the airline informed the stock exchanges that it had defaulted on loan repayment, following which the lenders agreed to take control of the cash-strapped airline. On March 25, the lenders implemented a resolution plan that required Goyal and his wife to step down from Jet Airways’ board. Goyal also gave up his position as the chairman of the airline.

As per the resolution plan approved by lenders last month, they were empowered to take over majority equity in the airline. This was being done under the Reserve Bank of India’s Feb. 12, 2018 circular. However, when the Supreme Court struck down the controversial circular earlier this month, lenders decided not to proceed with the acquisition of stake in the airline.