Over 16,000 staff jobs are threatened and hundreds of passengers stranded as troubled Jet Airways temporarily shuts down its domestic and international flights. Once at the peak of the industry, the airline operated over 120 planes and more than 600 daily flights. Hundreds of angry employees have protested in New Delhi and Mumbai, accusing management of leaving staff in the dark about the airline’s worsening crisis. Asian Voice is doing a report on the devastating fall of what was once the second-largest airline in India. Those who have been personally affected by the crisis or know someone who has, kindly contact us at [email protected] and we will include your story in our report.
Lenders are seeing merit in the offer by overseas funds TPG and Indigo Partners for ailing Jet Airways, even as they failed to disburse a £150 million lifeline for the private carrier despite pleas by the airline that it's staring at a possible shutdown in the absence of funds. With immediate funding proving tough, the Jet board will meet to consider all options - including a temporary shutdown. “...the current status of our engagement with the lenders and other related matters shall be placed before the board in the meeting, where the management will seek guidance from the board on the next steps forward. We will keep you updated on all critical developments,” Jet CEO Vinay Dube told employees, adding that international operations would remain suspended until Thursday.
In a statement, SBI said the bid process was being vetted by the legal team at SBI Caps and prospective bidders would be shortlisted soon. Sources, however, indicated that the lenders may back the funds if they found their bid attractive, a move that may come as a blow to founder Naresh Goyal and shareholder Etihad’s attempts to wrest control. The two submitted separate offers last week with financial bids due to be submitted by the end of the month.
The discomfort of banks may be stemming from the reluctance of the two Jet shareholders to bring money on the table despite the airline being on the brink of collapse. At Monday’s meeting with Jet, lenders suggested that the £150 million being demanded by the current management may not be able sustain the carrier for long and Goyal and Etihad may need to chip in as well, a senior banker said.
SBI-led lenders had promised to infuse additional funds of £150 million last month, after they acquired a 50.1 per cent stake in the airline. The proposed transactions did not happen. According to the bank-led resolution plan, lenders were to convert one rupee of equity into 114 million shares of the airline. That, however, did not happen as the RBI circular dated February 12, 2018 facilitating this was struck down by the Supreme Court.
Seven entities submit EoI
Meanwhile, estranged partners Etihad and Naresh Goyal are rumoured to be among the seven entities who have submitted an expression of interest (EoI). Others are California-based investment firm TPG, Phoenix-based private equity firm IndiGo Partners, which owns budget airline Frontier, Redcliffe and Think Equity as a consortium, two individuals together and a senior executive vice president of Jet Airways with two others.
Sources in State Bank of India, the window is not closed for those interested in taking over Jet and lenders will remain open for new proposals if they do not find any satisfactory proposals. Lenders also say the last date for EoI is not sacrosanct as a certain category of investors can bid directly without going through the expression of interest process.
