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Jet employees ask SBI to consider their bids; assure to arrange up to Rs 7,000 crore

Two staff unions, SWIP and JAMEVA, have requested SBI to consider the "employee consortium" as an intending bidder and say they can bring in up to Rs 7,000 cr from employees' contributions over time as well as external investors

twitter-logo BusinessToday.In   New Delhi     Last Updated: April 30, 2019  | 13:36 IST
Jet employees ask SBI to consider their bids; assure to arrange up to Rs 7,000 crore
While SWIP boasts around 800 members, about 500 employees are with JAMEVA.

Having seen no change in Jet Airways' fortunes with the lenders, the grounded airline's employees now want to take matters into their own hands. Two staff associations have written to the State Bank of India (SBI) Chairman Rajnish Kumar asking the lead bank to consider the "employee consortium" as an intending bidder for the carrier. The Society for Welfare of Indian Pilots (SWIP) and the Jet Aircraft Maintenance Engineers Welfare Association (JAMEVA) communicated to SBI that they can bring in up to Rs 7,000 crore over a period of time. While SWIP boasts around 800 members, about 500 employees are with JAMEVA.

The letter dated April 29 claims that the contribution from employees would be realised from their future earnings and increased productivity. "As per our initial estimate, the contribution of employees group over a hypothetical 5-year Employee Stock Ownership Programme [ESOP] is likely to be upward of Rs 4,000 crore," it stated, adding, "we are also confident of securing an investment commitment of up to Rs 3,000 crore from outside investors." The proposal for an "employee-led turnaround" is reportedly modelled on the similar success stories in the West, like the one at United Airlines in 1994.

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The letter has been signed by four people - SWIP general secretary Ashwani Tyagi, JAMEVA president Ashish Kumar Mohanty, Jet Airways manager (human resources) B.B. Singh and Jet Lite senior vice-president (operations) and accountable manager P.P. Singh. "We confirm that a proposal for employee takeover of Jet Airways has been submitted by us," the two unions said in a joint statement. "We are optimistic that the banks and Government of India will give our plan a serious consideration." This is the first time in the airline's 25-year-old history that its employees have come together with a proposal to run it.

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Significantly, the deadline for submitting initial bids has already ended. The four shortlisted bidders - Etihad Airways, Jet's largest shareholder, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF) - have been issued bid documents on April 16 and the deadline for final bid submission is May 10. SBI Capital Markets is managing the bidding process on behalf of the lenders' consortium.

Sushmita Choudhury Agarwal with PTI inputs

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