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Jet Airways crisis: Hinduja, Etihad Group halt rescue efforts

BusinessToday.In     June 11, 2019

Hinduja Group and Etihad Airways PJSC (public joint stock company) may not proceed with the Jet Airways deal as anticipated. This will prove to be blow to the grounded airline's fight for survival. According to reports, London-based Hinduja Group has decided to halt their negotiations for a stake in Jet Airways and Etihad has put their investments plan on hold.

According to a Livemint report, two promoters of Hinduja feel that it is too risky to get involved with the grounded airline now due to ongoing government investigations and the recent insolvency plea submitted by two operational creditors, Shaman Wheels and Gaggar Enterprises, at the National Company Law Tribunal (NCLT).

The bankruptcy court adjourned the matter to Thursday and has asked the creditors to serve notices to the airline for their dues.

Moreover, the income tax department is probing possible tax violations by the airline. The corporate affairs ministry has ordered a probe into Jet Airways' books after the Registrar of Companies submitted a report to the ministry highlighting instances of violation of the Companies Act in the company.

Separately, the Enforcement Directorate is also probing to see if certain FDI norms were violated by the airline when Etihad took a stake in Jet Privilege, the airline's frequent flyer programme in 2014.

Etihad Airways that had earlier expressed interest in reinvesting has also put their plans on the back burner, a person in the know told the daily. The airline had acquired a 24 per cent stake in Jet in 2013 for about Rs 2,060 crore, followed by 50.1 per cent stake in JPPL in 2014 for over Rs 900 crore.

As per the daily, none of the companies, including State Bank of India, responded to their queries.

Jet Airways lenders, led by SBI have been trying to resolve the insolvency crisis at Jet Airways outside NCLT as they fear little or no recovery.

Following reports of Etihad and Hinduja pausing resuscitating efforts, Jet Airways share price sulked in early trade today amid these reports. Jet Airways share price fell up to 12.66% to 109.35 compared to the previous close of 125.20 on BSE. The airline's 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.

Also read: End of the road for Jet Airways! Hinduja, Etihad Airways pull out of rescue efforts; stock sulks

Also read: Jet Airways crisis: Mumbai court to hear insolvency petitions against airline

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