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Jet Airways shares slump upto 11.4% after reports of Etihad Airways' non-binding offer, bleak prospects for cash-strapped airline

Bengalusu: Shares of Jet Airways Ltd fell as much as 11.4 percent on Monday after media reports said a buyout offer from Middle Eastern carrier Etihad Airways was non-binding and might not guarantee a deal for the struggling Indian carrier.

Etihad Airways, which owns an about 24 percent stake in Jet, submitted a bid for the airline, the unit of State Bank of India (SBI) overseeing the sale of the stricken carrier said on Friday.

That had raised hopes of a bailout for cash-strapped Jet, which has about $1.2 billion in bank debt.

 Jet Airways shares slump upto 11.4% after reports of Etihad Airways non-binding offer, bleak prospects for cash-strapped airline

Representational image. Reuters.

The Mint newspaper said here on Monday that Etihad Airways wanted a commitment from banks on additional loans once it infuses equity into the company.

The Middle Eastern carrier had not been able to find a local partner and lenders may need to take about 80 percent haircut on their outstanding loans to Jet Airways, the newspaper said, citing banking sources.

Shares of the carrier, which have tumbled almost 70 percent over the past year, were down 5 percent at Rs 144.3, as of 0445 GMT.

Jet, which owes vast sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from 17 April after its lenders refused to extend more funds to keep the carrier flying. SBI also received two unsolicited, non-binding bids, the bank said on Friday.

Jet Airways and SBI were not immediately available for comments.

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Updated Date: May 14, 2019 14:48:32 IST