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Jet Airways crisis: Etihad Airways submits binding bid; State Bank of India says it has received two unsolicited bids

State Bank of India (SBI) said on Friday that it has received two unsolicited bids for ailing Jet Airways, and "one" more is expected by the end of the day, keeping the hopes for the revival of the grounded carrier alive, nearly a month after the debt-laden airline was forced to ground all operations due to funding troubles.

The consortium of 26 lenders, led by State Bank which now owns 51 percent in the airline, had invited expressions of interest (EoIs) between 8-12 April and had received four preliminary bids.

Etihad Airways has reportedly submitted a binding bid for Jet Airways, CNBC-TV18 reported. Etihad Airways is interested in re-investing in embattled Indian carrier Jet Airways for a minority stake, subject to certain conditions, a spokesman for the Middle Eastern carrier said on Friday.

“Etihad re-emphasises that it cannot be expected to be the sole investor, and that, amongst other requirements, additional suitable investors would need to provide the majority of Jet Airways’ required recapitalisation,” the spokesman said in a statement.

“There was a submission with conditions,” the spokesman said.

AdiGro Aviation, part of the London-based Adi Partners, on Thursday submitted a binding bid to buy a stake in the grounded Jet Airways, according to CNBC-TV18. 

Friday is the last day to submit financial bids and media reports said none of the four bidders--private equity firms IndiGo Partners and TPG, and Jet's strategic partner Etihad and the country's sovereign wealth fund NIIF--are unlikely to submit a financial bid.

The lenders are offering 31.2-75 percent stake in the company on a fully diluted basis. Currently, the airline owes Rs 8,000 crore to the lenders.

Jet, once India’s largest private airline, stopped all flights on 17 April after its lenders, led by SBI, declined to extend more funds to keep the carrier going. “(We have) made disproportionate efforts to keep Jet flying,” the bank’s chairman Rajnish Kumar told reporters.

The SBI announcement comes even as Jet’s offices are being vacated at many airports across the country and employee access is being revoked.

 Jet Airways crisis: Etihad Airways submits binding bid; State Bank of India says it has received two unsolicited bids

Representational image. Reuters.

SBI has invited binding bids for a stake in the airline that is saddled with roughly $1.2 billion in bank debt and that has been struggling with mounting losses as it tried to compete with low-cost rivals.

All bids were to be submitted by 1800 IST (1230 GMT) on Friday.

“This world lives on hope so there is hope till 6 pm,” said Kumar. He declined to give any detail on the bidders, how serious the parties were and what terms were being offered by the interested parties.

If a deal fails to materialise the airline could be dragged into bankruptcy by creditors, putting at stake the livelihoods of its 22,000 employees.

According to a report in The Economic Times last week, three of the four qualified bidders—Etihad Airways, TPG Capital and Indigo Partners—have not signed non-disclosure agreements which are necessary for conducting due diligence.

Jet founder Naresh Goyal, who was forced to step down from the airline on 25 March as part of a deal with lenders, had earlier partnered with Future Trend Capital to submit a bid for investing in the airline. But later he reportedly withdrew the offer, as others threatened to walk away.

Jet Airways shares were 2.85 percent up at Rs 151.80 on BSE during end of trading hours today.

--With inputs from agencies

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Updated Date: May 10, 2019 18:55:45 IST