No Show For Jet Airways On Day 1 Of Bidding: No Expression Of Interests Received From Potential InvestorsJet 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.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber