End of the road for Jet Airways! Hinduja, Etihad Airways pull out of rescue efforts; stock closes 10.58% lower
BusinessToday.In June 11, 2019
Jet Airways share price sulked in early trade today amid a report that Hinduja Group and Etihad Airways may not proceed with plans to resurrect Jet Airways.
London-based Hinduja Group has decided to stop talks to buy a stake in the ailing airline, while Etihad Airways of Abu Dhabi has also stalled its plan to infuse more funds into the Mumbai-based airline, according to a report by Mint.
On Monday, two operational creditors--Shaman Wheels and Gaggar Enterprises-took it to the insolvency court National Company law Tribunal (NCLT) seeking bankruptcy proceedings against the airline. This also dampened sentiment around the stock of ailing airline.
Jet Airways share price fell up to 12.66% to 109.35 compared to the previous close of 125.20 on BSE.
Jet Airways share opened at a loss of 9.98% at 112.70 and fell to a fresh 52-week low of 109.35 on BSE.
Its market capitalisation fell to Rs 1,279.67 crore with 3.91 lakh shares changing hands on BSE.
The stock has been losing for the last seven days and fallen 24.86% in the period. Jet Airways share price has lost 71.65% during the last one year and fallen 59.14% since the beginning of this year.
The stock is trading below its 50-day and 200-day moving averages of 144.73 and 225.53 level. Jet Airways share price closed 10.58% or 13.25 points lower at Rs 111.95 on BSE.
After Shaman Wheels and Gaggar Enterprises filed separate insolvency pleas in the NCLT against the ailing airline, the tribunal issued notices to Jet Airways and banks which own the airline now and posted the matter for further hearing on June 13 when it will decide on admitting or rejecting the bankruptcy pleas.
The development comes at a time when banks are looking to resolve the once premier airline's debt issues outside the insolvency process.
Jet Airways owes more than Rs 8,000 crore to a consortium of banks led by the State Bank of India, which now run the airline, while it has a much larger debt pile by way of accumulated losses to the tune of Rs 13,000 crore and vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore.
The banks have appointed SBI Capital Markets as the investment banker to find an investor to scout an investor for the company.
Bankers, after taking over the airline late March had invited bids on April 8 to sell up to 75 percent stake in the crippled carrier that formally stopped operations on April 17. Though it had received initial bids from parties- Ethihad Airways, two private equity players TPG Capital and Indigo Partners, and the sovereign wealth fund NIIF, none of them chose to submit the final bids.
Edited by Aseem Thapliyal