Etihad Airways, the second-largest shareholder in Jet Airways and other lenders to the airline have reportedly approach UK's Hinduja Group for a stake sale.
"The Hinduja Group has so far not given a clear commitment about investing in Jet, but began showing interest after Etihad representatives approached GP Hinduja, the elder brother, who heads the group. The senior Hinduja, in turn, put Etihad in touch with Ashok Hinduja, the younger brother, who leads the India business," reported Economic Times.
Indian-born industrialist brother, Sri and Gopichand Hinduja, last week reclaimed the title of Britain's wealthiest by posting fortunes of 22 billion pounds to their name. The industrialist brothers posted a 1.35 billion jump in their fortunes to rank at the top of The Sunday Times Rich List 2019. They had secured the number one rank back in 2014 and 2017. The London-based industrialist, along with UK-based brother Sri, 83, and their brothers Prakash, 73, and Ashok, 68, who live in Geneva and Mumbai respectively, control more than 50 companies with a total turnover of nearly 40 billion pounds worldwide in 2018, the Rich List said. The Hindujas also own Ashok Leyland, India’s second-largest truck maker by sales.
In 2001, the Hinduja Group bid for Air India, 40% of which was up for sale. They had also bid for 26% in Indian Airlines The consprtium comprising of Ashok Leyland, Hinduja Finance Corporation and an overseas corporate entity, Machen Development Corporation, had put in bids for the two airlines but the stake sales did not take off. The group is reportedly also keen on Air India's disinvestment plan.
Jet, once the biggest private carrier in the country, owes vast sums to its lessors, employees, fuel suppliers and other parties. It stopped all flights from April 17 after its lenders refused to give it any more funds to keep the carrier flying. The chances of its revival appeared bleak without any sign of a majority partner, and with the exit of key officials and a large number of its fleet going to rivals.
Meanwhile, the chief executive and two other senior figures at Jet Airways quit on Tuesday, further eroding any hopes of a rescue of the debt-laden carrier that grounded operations last month. The departure of Chief Executive Vinay Dube comes hard on the heels of the resignation of Chief Financial Officer Amit Agarwal, announced earlier on Tuesday. Agarwal’s resignation was effective May 13, the company said in a statement.Late on Tuesday, the company said that Kuldeep Sharma, who was its company secretary and compliance head, has also stepped down with immediate effect. Jet’s Chief People Officer Rahul Taneja had also resigned.
For months, Jet has tried to convince investors, including Etihad, to pump in money and save the airline. But suitors had some qualms and a deadline for any interested parties to submit binding bids for the carrier ended on Friday with no such offers.
State Bank of India (SBI), Jet’s lead lender and the bank overseeing the sale process, said at the time it had only received three conditional offers, including one from Etihad.
“This had to happen,” said analyst Ronil Dalal of Ambit Capital. “Considering the kind of bids that have come in and the monetary value of those bids, it seems like it is too little.”
“It was long expected that Jet will eventually shut down and I think now that’s coming to fruition.”
Jet Airways grounded its operations on April 17 after running out of cash and the lenders-led resolution plan not working. In the bid process, managed by SBI Caps, Etihad put in a letter of interest to re-invest in a minority stake in Jet just before the end of deadline on Friday. The tough conditions set by Etihad and absence of a majority investor add up to a bleak scenario for the Naresh Goyal-founded airline.
More than 60 per cent of the airline's slots have been distributed among others and half of its fleet has been repossessed by lessors. While junior employees in the airline have not been paid salaries for at least two months, the senior management and pilots, engineers have not been paid since January.