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Jet sinks deep, resolution faces many challenges

IANS  |  New Delhi 

Grounded faces multiple challenges even as lenders act on partner Etihad Airways' suggestion to find a for the

Among the major issues are conversion of lenders' debt into equity in absence of required direction from regulator RBI and clarity over substantial ownership and management control.

"The issue is, by the time all this will happen, it will be too late. The entire leadership team has already gone. The board has remained with very basic numbers..there are only three members left," said a person close to the group.

He doubted if lenders led by (SBI) would be able to find a for the given its precarious financial health.

"Had Etihad come with the offer to raise its stake to 49 per cent, it would have probably been easier for the lenders to find a But Etihad has been insisting that it will remain a minority partner so it is going to be really very difficult," the source added.

The veteran further said that there is no guarantee that Etihad will agree to work with the new majority investor.

"Etihad should have chemistry also with the new investor," he emphasised.

Besides offering just Rs 1,700 crore - a fraction of the required fund of Rs 15,000 crore to revive the - Etihad has in its bid proposal put the onus of finding majority buyer on lenders.

The Gulf carrier also wants exemption from giving an open offer in case its stake goes beyond 26 per cent threshold for open offer.

It has also sought substantial write-down of Jet's Rs 8,400 debt.

Having run out of cash, suspended its operations on April 17. Subsequent to this, thousands of employees have left the carrier to join rival companies. Its aircraft are also being gradually de-registered.

All three key management executives of the airline, its CEO, and CPO (Chief People Officer), have resigned.

Lenders of led by SBI are currently in the process of selling the airline to recover their dues of over Rs 8,400 crore. Private equity firm TPG Capital, Indigo Partners, and (NIIF) and had been shortlisted to submit their bids after they gave their

By May 10, the last date for submitting the binding bids, only Etihad had submitted its offer and that too in the eleventh hour. The other two bids for the airline were unsolicited.

--IANS

nk/sn/bc

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 14 2019. 19:30 IST
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