Matters complicated further for the airline with the series of resignations from the top management since May 13.
By Anwesha Ganguly
Abu Dhabi-based Etihad Airways and the Hinduja Group are still holding talks to hammer out a deal on their bid to acquire grounded Jet
Airways India. Lenders expect a proposal from the parties sometime next week, sources told FE. Etihad and Hinduja representatives held talks on Thursday regarding their likely investment proposal for Jet.
Although media reports on Friday suggested the talks fell through, a Hinduja Group spokesperson termed the reports “speculative”.
However, talks are nowhere close to conclusion yet and with no buyer, the lenders may consider liquidating the airline. “We will come to know of a decision sometime next week, hopefully. If in ten days, there is still no deal, we may have to consider going to the National Company Law Tribunal,” a person involved in the process said.
Meanwhile, an Etihad spokesperson said: “Etihad continues to work directly with key stakeholders in India to help find a solution which would ensure Jet’s return as a viable and competitive Indian airline, as it has been doing consistently for the past 15 months.”
FE had earlier reported that deal hinges on multiple conditions being met, including lenders taking a significant haircut on the existing debt of Jet Airways and infusing additional capital into the defunct airline. Banks are not opposed to taking a haircut on debt, but it all depends on the final proposal, a top official involved in the discussions said.
“Lenders want to see the final proposal put forth by Etihad and the Hindujas, and take a call on the matter of debt haircut. Banks are willing to be a little flexible, but we hope for a deal which is reasonable to all parties,” the official said.
Lenders have reportedly pegged the total liabilities of Jet Airways at around `12,000 crore. State Bank of India, Punjab National Bank, IDBI Bank, ICICI Bank and Yes Bank are among the lenders that have exposure to the grounded airline.
The lenders had initiated the sale process in April, after the airline failed to meet its debt obligations. Etihad Airways, a strategic partner of Jet Airways, was the only party to make an offer.
Jet Airways temporarily halted operations on April 17 after lenders rejected its request to provide emergency funding. The civil aviation ministry has allotted a significant portion of the airline’s slots in major airports to other scheduled carriers. Matters complicated further for the airline with the series of resignations from the top management since May 13.