Jet Airways revival: Lenders may initiate fresh talks with NIIF soon; reach out to Hinduja group offering stake in airline
This move is a major step towards reviving Jet Airways, which suspended its entire operations on 17 April due to acute liquidity crunch, the report said.
The lenders' consortium led by SBI and state-run NIIF are expected to meet this week to initiate fresh talks
The efforts to revive Jet Airways suffered a major setback after four senior executives quit the ailing airline
Shares of Jet Airways plunged over 7% on the bourses on Tuesday following the exit of Agarwal
The lenders of Jet Airways are yet to give up hopes of reviving the temporarily grounded airline. In the latest development, the SBI-led consortium of lenders is looking at a slew of options to revive the cash-strapped airline--from engaging with National Investment & Infrastructure Fund (NIIF), launching a fresh search for a majority investor in Jet Airways and, along with Etihad Airways approach Hinduja Group to come on board as an investor.
The lenders' consortium led by State Bank of India (SBI) and government-backed wealth fund NIIF are expected to meet this week to initiate fresh talks in a bid to strike a deal, said a report in Business Standard citing people who are aware of the development. The move is seen as a major step towards reviving the embattled airline, which suspended its entire operations on 17 April due to acute liquidity crunch, the report said.
In another development, lenders to Jet Airways and its previous strategic partner Etihad Airways reportedly reached out to Hinduja Group offering a stake in the grounded airline, according to The Economic Times quoting people in the know of the matter.
Though the Hinduja Group is yet to give a clear commitment about investing in Jet Airways, it reportedly showed interest after Etihad Airways representatives approached GP Hinduja, the elder brother, who heads the group, the report said. The senior Hinduja, in turn, put Etihad Airways in touch with his younger brother, Ashok Hinduja, who leads the India business.
Meanwhile, the consortium of lenders are reportedly planning to launch a fresh search for a majority investor in Jet Airways, according to BloombergQuint.
In the absence of any major bidders coming up for the stake in Jet Airways, the lenders at a meeting on Monday decided to start another round of search for investors, the report said quoting people aware of the development.
This development comes after a non-binding offer was made by the Etihad Airways which might not guarantee a deal for the struggling Jet Airways. Etihad Airways, which owns an about 24 percent stake in Jet Airways, submitted a bid for the airline, the unit of SBI overseeing the sale of the stricken carrier said on Friday.
Earlier, two unsolicited bidders of Jet Airways approached Etihad Airways apparently showing interest to partner with the UAE-based airline. Lakshay Uttam, which is part of the consortium that also includes British entrepreneur Jason Unsworth, and AdiGro Aviation, part of the AdiGroup, had approached Etihad Airways to join in the revival bid of Jet Airways.
The efforts to revive Jet Airways suffered a major setback after four senior executives, including Chief Executive Vinay Dube and his deputy Amit Agarwal, quit the ailing airline in a span of 24 hours.
Amid lenders scrambling to find a suitor, the cash-starved carrier on Tuesday announced the exit of three executives — Dube, Agarwal and Company Secretary Kuldeep Sharma — while a source said the carrier's Chief People Officer Rahul Taneja also put in his papers.
Except for Agarwal, who quit on Monday, Dube, Agarwal and Sharma resigned on Tuesday.
Shares of Jet Airways plunged over 7 percent on the bourses on Tuesday following the exit of Agarwal. On Wednesday, shares were down 5 percent in afternoon trade.
On 10 May, SBI chairman Rajnish Kumar said the lenders have received two "unsolicited" bids for the company and "one" more is expected by the end of the day, keeping hopes alive for the revival of the grounded carrier.
Early this month, two senior finance ministry officials said that the government saw little hope of a bidder emerging for debt-laden Jet Airways. as parties that had initially expressed interest in Jet, had not made firm bids to bail it out, increasing the odds that it could soon face bankruptcy proceedings.
“There is little scope in the revival of Jet,” said one official, adding that if a bidder emerged, the government was still willing to return slots to the private airline which have temporarily been given to rivals.
A second senior finance ministry official said it was only a matter of time before someone dragged Jet Airways to the National Company Law Tribunal (NCLT) —the country's bankruptcy court — for recovery of dues from Jet Airways.
Last month, Jet Airways employees' consortium proposed to take over the airline with at least Rs 3,000 crore expected from outside investors for the bid, according to two staff unions. This is the first time that employees came together with a proposal to run the more than 25-year-old Jet Airways.
Two associations representing pilots and engineers—SWIP and JAMEVA—have written to the SBI chairman proposing that they would take over the airline and bring in funds to the tune of Rs 7,000 crore.
The Society for Welfare of Indian Pilots (SWIP) and the Jet Aircraft Maintenance Engineers Welfare Association (JAMEVA) have written a letter to the SBI chief asking the lead lender to consider "employee consortium" as an intending bidder for the carrier.
— With PTI inputs
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In February 2011, the Manmohan Singh-led government cancelled the deal for 'security reasons' after allegations of favouritism were made