National / World

Etihad puts riders for fund infusion, Jet revival an uphill task


By Nirbhay Kumar

New Delhi, May 13 (IANS): Attaching too many riders for infusing funds into grounded Jet Airways, the Abu Dhabi-based Etihad has put the onus of reviving the airline on lenders led by State Bank of India (SBI).

Besides offering a meagre fund infusion of Rs 1,700 crore, the Gulf carrier wants the lenders to find a majority buyer and exemption from making open offer in case its stake breaches 26 per cent mark. Etihad also wants a one-time settlement by banks with operational creditors.

"Banks had earlier promised to provide Rs 1,500 crore but the money never came. Further, Etihad can not be a majority owner in Jet Airways. There are other issues as well. So, it is playing safe," said an industry expert wishing not to be named.

Another senior executive said that the Etihad proposal would remain a non-starter given the kinds of commitment it has sought from banks.

"Going by the current offer, it may well be the end of road for Jet Airways," he said.

The fast value erosion of Jet airways has also made Etihad a reluctant and disinterested investor.

IANS had first reported on May 10 that the stake sale process initiated by SBI-led lenders for grounded Jet Airways would unlikely get any "serious bid" from investors and public sector banks may be looking at massive write-off of loans.

"There is not much value left in Jet Airways. Most of its slots have gone, pilots have left and planes being de-registered. I don't expect any serious bid. Banks are going to lose most of their money in Jet," an industry insider had told IANS.

Run out of cash, Jet Airways suspended its operations on April 17. Subsequent to this, hundreds of employees have left the carrier to join rival companies. Its aircraft are also being gradually de-registered. These events have added to growing uncertainty about airline's revival.

Lenders of Jet Airways led by SBI are currently in the process of selling the airline to recover their dues of over Rs 8,400 crore. Private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways had been shortlisted to submit their bids after they gave their EoIs.

On May 10. the last date for submitting the binding bids, only Etihad gave its offer and that too in the eleventh hour. The other two bids for the airline were unsolicited.

 

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Comment on this article

  • Rita, Germany

    Wed, May 15 2019

    Now the time has come to say adeus?Best is start some AKTIE .each one 1000 Rs or 500Rs,on the market .Some gulf based 10 people wanted to invest some crores ,what happened to it?State Bank too didnt hear the cry?If someone still has his old notes demonetized,put now out .Jet needs badly save the patient.

    DisAgree Agree Reply Report Abuse

  • Vincent Rodrigues, Katapadi/Bangaluru

    Tue, May 14 2019

    This may be the conditions stipulated by Ethiad with Jet while negotiation.

    DisAgree Agree [2] Reply Report Abuse

  • Joseph, Qatar

    Tue, May 14 2019

    Did the Indian bankers express "sale interest" of Jet Airways across to ALL the leading Gulf carriers? It'll be interesting to know if any other party apart from Etihad has expressed its interest. Just heard that Qatar Airways has expressed it's interest to buy the ailing airline "subject to their Terms and Conditions". The Aviation Ministry should grab this opportunity and let go its conditions/prerogatives keeping in mind the interest of it's employees who are in a "tight corner".

    DisAgree Agree [5] Reply Report Abuse

  • Vishal, Mangalore

    Tue, May 14 2019

    I won't be surprised if one fine morning we get to hear that Ambani or Adani is interested in Jet Airways. I feel if Modi comes back to power, this might materialise. If that happens, we can safely assume that Air India would be strangulated to dealth. It will die an artificial death, not a natural death.

    DisAgree [4] Agree [28] Reply Report Abuse

  • Zameer, Qatar

    Tue, May 14 2019

    Yes rightly said bro

    DisAgree Agree [10] Reply Report Abuse

  • Satya, Mangalore

    Tue, May 14 2019

    UPA killed Kingfisher and BJP killed Jet...…………...That is the sad story.

    DisAgree [29] Agree [14] Reply Report Abuse

  • Vishu, Moodabidri

    Tue, May 14 2019

    List goes on.. BSNL, MTNL, AirIndia..Etc.

    DisAgree [1] Agree [33] Reply Report Abuse

  • Dennu, Mangalore / Muscat

    Tue, May 14 2019

    Ambani, Its a perfect time to start Jio Airways

    DisAgree [1] Agree [48] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Tue, May 14 2019

    Only Mallya, Nirav & Chokshi can revive Jet Airways ...

    DisAgree [7] Agree [39] Reply Report Abuse

  • Vishu, Moodabidri

    Tue, May 14 2019

    Guys!! Jet Airways, now only a history.

    DisAgree [1] Agree [28] Reply Report Abuse

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