SBI gets two non-binding bids for Jet Airways

Daniel Fowler
May 13, 2019

Lenders of Jet Airways led by the state-run State Bank of India (SBI) had mandated SBICaps to initiate the process of selling the airline to recover their dues of over Rs 8,400 crore.

Earlier in the day, State Bank of India chairman Rajnish Kumar at a press conference to announce the financial results had said he was expecting a serious bid, apart from the two unsolicited ones which had already been submitted, thereby building up a suspense.

Etihad Airways has submitted a financial bid to the lenders of the grounded Jet Airways for taking part in the debt resolution programme. The lenders are offering 31.2-75 per cent stake in the company on a fully diluted basis. Currently, the airline owes over Rs 8,000 crore to its lenders.

Jet Airways aircrafts are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, April 18, 2019. The government had recently appealed to airlines to not hike airfares after the grounding of Jet Airways led to a spike in ticket prices due to a shortfall in capacity. It added that the banks are likely to evaluate the bids next week.

"Etihad re-emphasises that it can not 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 statement added.

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While Etihad has submitted a binding bid - which means it has quoted a price - it is unclear if the unidentified bid belongs to a consortium of TPG, NIIF and Indigo Partners. "Day by day, losses and loans are rising at Jet, the more the process is delayed the more the situation becomes irreparable".

As per informed sources, at least three unsolicited bids have been received.

"It is once again advised to abide by the statutory requirement of the Act & Scheme and report compliance to undersigned to avoid above unpleasant action against Establishment and responsible persons", EPFO assistant PF Commissioner Dilip K. Rathod has written to Jet Airways.

Astatement from SBI Capital Markets Ltd confirmed a sealed bid from Etihad Airways in the bidding process, but did not identify any other bidders.

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.

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