ZCZC
BCN-05
INDIA-ECONOMY-AVIATION-JET
India’s embattled Jet Airways gets two unsolicited bids
MUMBAI, May 11, 2019 (BSS/AFP) – India’s biggest lender Friday said it has
received two unsolicited bids for Jet Airways, raising hopes for the revival
of the debt-laden carrier which was forced to ground its entire fleet last
month.
The State Bank of India (SBI) leads a consortium of 26 lenders owning a
controlling stake in the Mumbai-based airline which was India’s second-
biggest carrier by market share before funding woes brought it to the verge
of bankruptcy.
SBI chairman Rajnish Kumar said he was hoping for one more buyer to enter
the fray before the deadline for submitting bids ended at 1230 GMT on Friday.
“Two unsolicited bidders have submitted EoI (expression of interest) for
Jet and we are expecting one more bid by the end of the day,” Kumar told
reporters without giving further details.
The lenders are offering up to 75 percent stake in the company on a fully
diluted basis, the Press Trust of India reported.
The SBI-led consortium has been looking to sell a controlling stake in
Jet, shortlisting four potential buyers including Etihad Airways which
already owns 24 percent.
Jet, which has debts of more than $1 billion, has been in a tailspin for
months. It has defaulted on loans and failed to pay many staff since the
start of the year.
After its lenders declined to extend more funds, the carrier was forced to
ground its entire fleet on April 17, triggering protests by thousands of
employees who have been not paid salaries.
A collapse of Jet, and the loss of more than 20,000 jobs, would deal a
blow to Prime Minister Narendra Modi’s pro-business reputation as he seeks a
second term in ongoing national elections.
Bad investments, competition from several low-cost carriers, high oil
prices and a weak rupee contributed to Jet’s financial demise, experts say.
Its plight has been compared to that of India’s Kingfisher Airlines, which
ceased operations in 2012 before later going bust, causing thousands of job
losses and huge financial costs to lenders.
Shares of Jet Airways were up nearly 3 percent Friday on the Bombay Stock
Exchange after SBI’s announcement.
BSS/AFP/HR/0935