Clarity on Jet Airways expected in a week — SBI chief

[caption id="attachment_249717" align="alignright" width="300"] Rajnish Kumar[/caption] New Delhi, May 18 (IANS): It may not be over till it is over. Even as some industry veterans believe that grounded Jet Airways may have hit the end of the road, State Bank of India (SBI) Chairman Rajnish Kumar remains optimistic that clarity over the future course of the airline will emerge in a week's time. "Various options are being evaluated. Legal opinion is being taken. There are many investors who are showing interest. We have to see whether they have the money and the wherewithal. I think the clarity should emerge in a week's time," the SBI top boss told IANS on Saturday. Asked if there are investors other than those who have submitted unsolicited offers, Kumar said that there are some but their seriousness will have to be checked. Lenders of Jet Airways, led by the SBI, are currently in the process of selling the airline to recover their dues of over INR 8,400 crore. Private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways were shortlisted to submit their bids after they put forward their Expression of Interest (EoI). But on May 10, the last date for submitting the binding bids, only Etihad gave its offer and that too in the eleventh hour. The other two bids received for the airline were unsolicited. Subsequently, the lenders are learnt to have got an offer from a Mumbai-based business group. While the lenders are vetting various proposals, most of the top Jet executives, including its Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Company Secretary, have resigned from their respective positions citing personal reasons. Close on the heels of the resignation of the airline's whole-time director Gaurang Shetty, Etihad nominee on the board Robin Kamark stepped down on May 16. Abu Dhabi-based Etihad Airways, which holds 24 per cent stake in the crisis-hit Jet Airways, is currently the only solicited bidder for a stake in the airline. But experts have found its bid unattractive for the lenders given the multiple riders attached to it. Besides offering to invest just INR 1,700 crore against the requirement of INR 15,000 crore to revive the crisis-hit airline, Etihad has in its proposal put the onus of finding a majority buyer on the lenders. The Gulf carrier also wants exemption from making an open offer in case its stake goes beyond 26 per cent.

Section of Jet staff seeks financial details to raise $700 mn.

A section of grounded Jet Airways' employees comprising members of airline unions have written to SBI Caps seeking asset and other financial details of the crisis-hit company for raising $700 million (INR 4,917 crore) from a mix of domestic and foreign investors. SBI Caps is the transaction advisor for the lenders of Jet Airways and managing the stake sale process for the debt-laden carrier. The State Bank of India (SBI) is the lead lender and currently in management control of the airline. "We would like to assure you that our resources are at your disposal if they can be of any help. Also, as understood by us during the meeting of 2nd May, we are actively working with potential Indian and foreign investors to secure equity based funding commitment of $700 million," Capt. P.P. Singh, Senior Vice President at Jet Airways, wrote to SBI Caps. Sensing that the options to revive the grounded airline are fast running out, a group of employees had on April 29 proposed to bid for management control of the airline. They claimed to secure a funding of INR 3,000 crore from outside investors. The employee group comprises members of Society for Welfare of Indian Pilots (SWIP) and Jet Aircraft Maintenance Engineers Welfare Association (JAMEWA). It is being led by Singh. The employee-investor consortium has asked SBI Caps to provide details about the level of debt post haircut by banks and restructuring. Among key financial details, Singh has asked as to how much stake investors will get after infusing $700 million and the fund requirements for running the airline for the next 24 months. Facing a severe liquidity crisis, Jet Airways had suspended its operations on April 17 and remains grounded. The airline lenders are trying to rope in an investor to resuscitate the airline and recover their money. While lenders are vetting various proposals, most of the top airline executives including its CEO, CFO and the Company Secretary have resigned from their respective positions citing personal reasons. Close on the heels of resignation by airline's whole-time director Gaurang Shetty, Etihad nominee on the board Robin Kamark resigned on May 16. Abu Dhabi-based Etihad Airways, which holds 24 per cent stake in crisis-hit Jet Airways, is currently the only solicited bidder for a stake in the airline. But experts have found its bid unattractive for the lenders, given multiple riders attached to it. Besides offering to invest just INR 1,700 crore against the requirement of INR 15,000 crore to revive the crisis-hit airline, Etihad, has in its proposal, put the onus of finding a majority buyer on the lenders. The Gulf carrier also wants exemption from giving an open offer in case its stake goes beyond 26 per cent.