Jet Airways crisis: No takers for airline's stake on day one of bidding; Etihad, NIIF may emerge as top contenders

The first day of the bidding process of the crisis-hit Jet Airways drew a blank as no investor turned up on Monday after State Bank of India (SBI) invited bids from strategic as well as financial bidders for stake sale in the ailing carrier, said a media report. According to a The Hindu Business Line report, citing a source close to the lenders, Etihad Airways along with National Investment Infrastructure Fund (NIIF) may emerge as a top contender for a majority stake in Jet Airways. The lenders are yet to receive any expression of interest (EoI) from any potential investor so far. The report quoting market experts said that Tata Sons, Delta Air, TPG, SpiceJet, along with the current stakeholders Etihad and Jet Airways founder Naresh Goyal could be the potential bidders for the debt-laden airline. [caption id=“attachment_4293967” align=“alignleft” width=“380”] Representational image. Reuters[/caption] SBI, which is the lead lender of a consortium of domestic lenders that have extended loans to Jet Airways, is looking for “change in control and management” of the carrier, as per a public notice, said a PTI report. SBI Capital Markets would be assisting and advising the lenders on the bid process. The bids have to be submitted by 10 April. The lenders’ consortium has taken control of the airline under a debt recast plan. Prospective bidders of struggling Jet Airways need to settle the airline’s existing debt as part of any deal to buy a stake in the carrier, its consortium of lenders led by SBI said in a statement on Monday. In a notice on its website, SBI Capital Markets, a unit of SBI, said that prospective bidders are required to submit expressions of interest for up to 75 percent stake in debt-laden Jet Airways by 6 pm local time (1230 GMT) on 10 April, said a Reuters report. Individuals, including foreign nationals, as well as a consortium of up to three companies, are allowed to bid for a stake in the airline subject to Indian laws, the notice said. Foreign ownership of Indian airlines is capped at 49 percent. Under the debt resolution plan approved by the Jet Airways’ board on 25 March, lenders have taken a majority stake in the airline and are set to infuse Rs 1,500 crore. Besides, Goyal, as well as his wife Anita, quit the board last month. The shareholding of Goyals has come down to 25 percent from 51 percent earlier. The acute financial crunch has forced the airline to ground aircraft, cancel flights and delay payment of salaries, including to pilots. The consortium has proposed to offer at least 3.54 crore shares of the airline comprising 31.2 percent of the equity share capital of the company and up to a maximum of 8.51 crore shares comprising 75 percent on fully diluted basis subject to approval, it said. “Bidders shall bear all costs associated with the preparation and submission of the EOI. The lenders or authorised representative shall not, under any circumstances be responsible or liable for any such costs in this regard, whether direct, incidental or consequential,” it added. It further said that the bidders can be strategic investors (SIs) and/ or financial investors (FIs). “SIs may include body corporates having experience in similar sectors with domestic or global experience or both. FIs may include private equity funds, investment funds etc,” it said. — With inputs from agencies