Jet Airways revival: Lenders plan to approach unsolicited bidders after Etihad Airways' non-binding offer

With the uncertainty persisting about the takeover of cash-strapped Jet Airways, lenders to the temporarily grounded airline are reportedly planning to approach unsolicited bidders as former strategic partner Etihad Airways has declined to hike its stake beyond 24 percent. Etihad Airways offered to infuse close to Rs 1,400 crore in Jet Airways and was keen to maintain its stake in the debt-laden airline at the current level of 24 percent, said a report in Mint quoting people aware of the development.

Etihad Airways offers to invest to the extent of maintaining its stake at 24% & invest upto Rs 1,700 cr in @jetairways as fresh equity: Sources tell @_ritusingh pic.twitter.com/YOMM5PIkx6

— CNBC-TV18 (@CNBCTV18Live) May 13, 2019

The fund offer from Etihad Airways is not sufficient to overcome the liquidity crunch in Jet Airways as its total liabilities are reportedly about Rs 15,000 crore now. This forced the State Bank of India-led (SBI) consortium of lenders to approach the bidders who showed interest in buying the stake in the embattled airline, the report said. [caption id=“attachment_6249291” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Earlier, two unsolicited bidders of Jet Airways approached Etihad Airways apparently showing interest to partner with the UAE-based airline, according to media reports. 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, said a report in Moneycontrol. On Friday, the lenders’ consortium to Jet Airways said it had received bids from Etihad Airways and a few unsolicited  parties to acquire stake in the grounded airline. The consortium of 26 lenders, which now owns 51 percent in the airline, had invited expressions of interest between 8 -12 April and had received four preliminary bids. The lenders are offering 31.2-75 percent stake in the company on a fully diluted basis. Friday (10 May, 2019) was the last day to submit the financial bids from the qualified bidders. SBI Caps, which has been mandated for the sale, in a statement said, “sealed bid from Etihad Airways has been received and the same will be submitted to lenders for examination.” It has also received a few unsolicited offers, which the lenders may deliberate on subsequently, the statement said, adding the banks are likely to evaluate bids next week. Jet Airways ceased operations temporarily on 17 April due to acute financial distress. SBI chairman Rajnish Kumar had said that two unsolicited bids had been received while one more bid was expected. The Gulf carrier, which acquired 24 percent stake in Jet Airways in 2013 also evinced its interest to “re-invest” in a minority stake in the carrier. 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. 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 State Bank of India (SBI) Chairman Rajnish Kumar proposing that they would take over the airline and can bring in up to 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. While SWIP has around 800 members, there are about 500 employees with JAMEVA. — With PTI inputs