After months of battling crises on multiple fronts, the crumbling Jet Airways may have finally caught a break. Five entities have reportedly already submitted expressions of interest (EoI) in the ongoing bidding process for a stake sale in the airline and Etihad Airways has now joined the bandwagon.
The Gulf carrier, which owns 24% of Jet Airways and is the second largest stakeholder, submitted its expression of interest (EoI) on Thursday, a day after the SBI-led consortium of domestic lenders extended the deadline for submission of initial bids to April 12, the Economic Times reported.
Last month, Etihad had sent alarm bells ringing when it formally asked SBI to purchase its entire 24% stake in Jet Airways at Rs 150 per share at a time the stock was trading on the BSE at Rs 218.50. The Abu Dhabi-based airline had picked up this stake in 2013 for $379 million (around Rs 2,060 crore at the time). Already a jittery participant in the discussions on Jet's bailout plan, it had also offered to sell its 50.1% stake in Jet Privilege.
While negotiations with Etihad had resumed after Jet Airways' founder Naresh Goyal stepped down from the board, the former's insistence on a waiver of the open offer requirement as per SEBI's norms had hitherto remained a bone of contention. As per the regulator's takeover code, if a company acquires more than 25 per cent in another listed company, it has to make an open offer to minority shareholders of the target firm. So far, SEBI has refused any exemption to any company, but it appears that Etihad could not ignore the siren song of the world's fastest growing aviation market.
The daily added it's still unclear whether Etihad's EoI mentions tying up with a partner. Note that a foreign carrier can neither hold over 49 per cent in a domestic airline, nor effectively control it.
According to media reports, other entities that have submitted EoIs include National Investment and Infrastructure Fund, Indigo Partners and TPG Capital. Speculation is rife that Goyal is also likely to join hands with a foreign carrier to submit initial bids for a stake in the airline he founded.
The cash-strapped Jet Airways has a lot riding on the outcome of the stake sale with its operational crisis continuing to spiral out of control. The airline informed the stock exchanges on Thursday that lessors had grounded 10 more of its planes, bringing its fleet strength down to 14. With this development, Jet Airways was compelled to indefinitely suspended operations to the Eastern and Northeastern states, as well as curtailed its international operations by a day, if not longer.
In addition, the airline needs to pay pending salaries to disgruntled employees threatening to go on strike as well as repay lessors- many of whom are planning apply to the aviation regulator to de-register their already grounded planes.
(Edited by: Sushmita Choudhury)