Insta
No Show For Jet Airways On Day 1 Of Bidding: No Expression Of Interests Received From Potential Investors
Jet Airways aircraft (Vijayanand Gupta/Hindustan Times via Getty Images)
Jet Airways has found no suitors to contend and buy the majority stake in its airlines on the first day of its bidding process. The bidding was open on Monday (8 April 2019) and the last day of receiving applications is Wednesday (10 April 2019). SBI and consortium of banks to which the airlines has defaulted payments to, will be overlooking the entire process.
SBI has recently taken over Jet Airways’ board after its founder, and chairman Naresh Goyal was recently forced to resign attributing to the mounting losses and falling quarterly results.
As per the report, bidders usually file an application on the last day of bidding as they like to keep things under wraps as long as they can.
The bidding process is expected to have private players like the TPG Capital, KKR, Delta Air and Lufthansa Airlines to participate along with Indian giants like Tata Sons and Spice Jet. However, sources close to the bidding process expect Etihad Airways, along with National Investment and Infrastructure Fund (NIIF) to emerge as the top contenders for acquiring a majority stake. Etihad airlines currently own a 24 per cent stake in the ailing airlines.
National Investment and Infrastructure Fund (NIIF) is set up by the Government of India in association with Abu Dhabi Investment Authority, Abu Dhabi has a majority stake in NIIF.
For SBI to sell its stake in the airlines to a strategic investor from the airline's industry or to a private financial investor, the bidding document lays the following rules “A strategic investor should have a net worth of at least Rs 1,000 crore and at least three years of experience in the industry. A financial investor should be with at least Rs 2,000 crore of net worth. In case the bidder is a consortium, it shall consist of not more than three members with shareholding of an individual member not being less than 15 per cent,” reports Business Line.
Jet Airways has over Rs 8,620 crore in debt and has posted a second consecutive quarterly loss of 1300 crore in 2018. The airlines was earlier forced to ground over 50 planes failing to pay the lease amount on time, losing one-third of its fleet and is currently only operating 41 of the 117 planes.
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