Reviving Jet Airways: Hindujas, Etihad, AdiGro to meet to explore options

Published: May 23, 2019 1:00:31 AM

The civil aviation ministry in the meanwhile has allotted a significant portion of the airline's slots in major airports to other scheduled carriers. Recently, Jet's CEO, CFO and a couple of other senior management put in their papers.

Recently, Jet’s CEO, CFO and a couple of other senior management put in their papers.

By Anwesha Ganguly & Arun Nayal

With the Hinduja Group signaling its interest in Jet Airways, efforts are on to form a consortium between it, Jet’s minority partner Etihad and UK-based Adi Partners, which had earlier put in an unsolicited bid for the grounded carrier. Such a consortium has the support of Jet’s founder-chairman, Naresh Goyal.
Sources said that the three parties — Hindujas, Etihad, and Adi Group — are meeting in Abu Dhabi on Thursday to discuss the details of such a consortium, who will bring in how much money and hold what percentage of stake. Representatives of the lenders, who are led by the State Bank of India, are also scheduled to attend the meeting.

So far, Etihad is the only party to have put in a formal letter of interest with SBI Caps, which is managing the sale process of Jet Airways on behalf of the lenders.

However, the Abu Dhabi-based airline has said that it does not want to go beyond its 24% stake in the grounded airline and will pump in only `1,700 crore.
Though the funding gap in Jet Airways is of around `8,000 crore, a minimum of `6,000 crore can put the airline back on wings. This requires investments beyond what Etihad is ready to commit.

“There is capital requirement of at least `6,000 crore. We have been in discussions over the past few weeks to see how that will be structured. Thursday’s meeting may not have a seminal outcome, but we expect to hammer out the structure,” one of the people aware of the developments told FE. The parties expect the lenders to take a significant haircut, the source added. The lenders have estimated the total liabilities of Jet at around Rs 12,000 crore.
Sanjay Viswanathan, chairman, Adi Partners, told FE he is hopeful that the sale will go through. “We have been in talks with Etihad and Hindujas. The lenders have been very supportive. We are fairly confident the deal will happen, as it is in the best interest of everyone,” Viswanathan said. The group is looking to invest around Rs 2,500 crore, and acquire up to 24.9% stake in the airline. “If all goes as per plan, the target is to get Jet operational by July 1,” he added.

The Hinduja Group has had some rounds of initial discussions with the lenders and Etihad Airways. The group, which is wary of any hostile takeover, has got the backing of Goyal also. However, no party is keen on Goyal holding a significant stake in the new structure. “We are clear we want Naresh Goyal’s consent, but we are not looking at him running the airline or being a significant stakeholder,” Viswanathan said.

Jet Airways temporarily halted operations on April 17 after lenders rejected its request to provide emergency funding. The civil aviation ministry in the meanwhile has allotted a significant portion of the airline’s slots in major airports to other scheduled carriers. Recently, Jet’s CEO, CFO and a couple of other senior management put in their papers.

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