With bidders shortlisted, what's next for India's Jet Airways?

SBI Capital, which is overseeing the sale process of Jet Airways, scotched reports about new investors showing interest in acquiring the airline
With bidders shortlisted, what's next for India's Jet Airways?
Industry sources said the Directorate General of Civil Aviation (DGCA) is also waiting for clarity on the Jet sale/revial efforts before taking decision on allotting international flying slots.
By James Mathew
Wed 08 May 2019 11:57 AM

The future of the debt ridden Indian carrier Jet Airways continues to hang in balance, with no clarity emerging so far on who - out of the four bidders shortlisted to acquire a stake in the carrier - will be submitting a binding bid.

May 10 is the deadline fixed by SBI Capital, which is overseeing the sale process of Jet Airways, for submission of the binding bids.

Abu Dhabi-based Etihad Airways, private equity majors TPG Capital and Indigo Partners and India’s sovereign infra fund National Investment and Infrastructure Fund (NIIF) are the four bidders shortlisted by SBI Capital.

Etihad Airways currently hold 24 percent equity in Jet Airways.

“Typically, binding bids come only in on the last day ... towards the closing hours of the deadline. We will get the clear picture on bidders only at the close of working hours on May 10,” a senior SBI official told Arabian Business.

The official did not want to be identified because of the secrecy with which the process is being handled.

There are also informal discussions taking place with some of bidders on the sidelines, the official said.

No new bids

The SBI official, however, scotched reports about new investors showing interest in acquiring Jet Airways.

The new investor groups, which have reportedly shown interest in Jet include two little known entrepreneurs and investment firms Future Trend Capital Investments, Redcliffe Capital and Adi Partners.

Future Trend and Adi Partners earlier teamed up with Jet Airways founder Naresh Goyal to submit an expression of interest for the airline. Redcliffe Capital submitted the EoI along with Think Capital. But none of those have been shortlisted to put in a bid.

Adding a new twist to the sale process, the founder and majority owner of Jet Airways Naresh Goyal has said he is willing to infuse $36 million (Rs 250 crore) into the airline to revive it.

In a letter to Jet employees on Monday, Goyal said he has made available the fund to the SBI-led banking consortium to the carrier.

In another development, the labour union political party Shiv Sena, which has members of airline and airport employees in Mumbai, has threatened to halt operations at Mumbai airport, if no resolution on Jet Airway’s revival is reached by May 10.

“The future of Jet Airways still remains hazy as no details are coming out on the on-going sale process of the airline,” an aviation analyst with rating agency ICRA has told Arabian Business.

The operations of the airline companies continue to be under pressure because of the high aviation fuel cost, which could be weighing on the minds of any prospective buyer for Jet, the rating agency analyst said.

"With reports appearing about majority of the bidders not accessing the data room of Jet Airways for due diligence, the future of Jet seems to be bleak," Aviation sector expert and former Executive Director of of PwC India, Dhiraj Mathur told Arabian Business.

"It appears SpiceJet has got Jet without investing a penny," Mathur added.

Industry sources said the Directorate General of Civil Aviation (DGCA) is also waiting for clarity on the Jet sale/revial efforts before taking decision on allotting international flying slots.

Indian carriers such as Air India and SpiceJet have reportedly approached DGCA for acquiring Jet Airway’s flying slots in the Middle East sector.

DGCA has already allotted Jet’s domestic slots to some of the Indian carriers on a temporary basis for three months.

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