The revival hopes for grounded Indian carrier Jet Airways remain cloudy even after Etihad Airways submitted the lone submission on Friday, the deadline fixed by SBI Capital for binding bids for the airline.
Etihad, which currently holds a 24 percent stake in Jet Airways, said it would acquire an additional minority stake in the debt-ridden carrier, but with several caveats.
The conditions include the SBI-led bankers finding a buyer to take majority stake in Jet Airways, the bankers agreeing to a one time settlement for Jet’s debt and the Abu Dhabi-based carrier getting exemption from making the mandatory open offer to minority shareholders of Jet.
“The conditions reportedly put forth by Etihad may be tough to meet and require approvals of multiple Indian regulatory agencies,” a senior banker with a PSU bank, who wished not to be identified, has told Arabian Business.
Etihad Airways has said it can only invest up to $242 million (Rs 1,700 crore) in Jet Airways, a fraction of what the grounded airline needs for survival, according to reports in India media.
In a statement, Etihad Airways confirmed its interest to re-invest in a minority stake in India’s Jet Airways, subject to conditions.
“Etihad re-emphasises that it cannot be expected to be the sole investor and that, amongst other requirements, additional suitable investors would need to provide the majority of Jet Airways’ required recapitalisation,” the Etihad official spokesperson told Arabian Business.
“India is one of the fastest-growing air transport markets in the world, and a significant economic partner of the UAE.
“Etihad has been working consistently with key stakeholders in India over the past 15 months to help find a solution which would ensure Jet’s return as a viable and competitive Indian airline, and continues to do so,” the spokesperson added.
Etihad was the only bidder which submitted the binding bid among the four short-listed bidders selected earlier through the expression of interest (EoI) process.
The other short-listed bidders were TPG Capital, Indigo Partners and National Investment & Infrastructure Fund (NIIF).
SBI and other lenders will have to re-start their search for a new majority investor if they want Jet Airways to fly again.
Under the Indian foreign direct investment (FDI) rules, foreign airlines or investors are not allowed to hold majority stake in Indian airline ventures.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.