Shares of debt-ridden private sector carrier Jet Airways plunged to a fresh 10-year low on Thursday morning, after a media report indicated that bidders have remained uninterested in following up on their bids.
Shares of debt-ridden private sector carrier Jet Airways plunged to a fresh 10-year low on Thursday morning, after a media report indicated that bidders have remained uninterested in following up on their bids. Jet Airways share price plunged by more than 20% to hit the day’s low at Rs 122. According to a report by the Economic Times, bidders for the private sector carrier so far remain uninterested in following up on their expressions of interest, dealing a major blow to the early revival of the airline.
Watch: Cannot Fund Mediclaim Policy, Jet Airways Tells Employees
Notably, while just ten days remain for the final submission of bids, three of the four qualified bidders — Etihad Airways, TPG Capital and Indigo Partners — have not signed nondisclosure agreements, a necessity for conducting due diligence, said the publication. Jet Airways management has also been trying to tap India’s biggest business houses for investment, the report added. Around 5.1 million shares changed hands in early trade compared with the 30-day average of about 19.8 million shares, according to a Reuters report.
Owing to a severe cash-crunch the airline had suspended mediclaim policy from May 1st. The policy lapsed on 30 April 2019, following which, the employees left to manage their medical treatments. Jet Airways Chief People Officer Rahul Taneja said Jet Airways would be unable to fund the premium for the group mediclaim policy in the absence of any emergency funding from the lenders or other sources. “We find ourselves facing a situation where we are not able to fund the premium of our Group Mediclaim Policy. The policy lapses on the midnight of April 30,” he said in a communication to employees.
Taneja said that the circumstances were not of their doing and they would have wished to do things differently, but are left with little choice. Notably, Naresh Goyal-founded full service carrier has more than 20,000 employees, including pilots and engineers. The domestic lenders to Jet Airways had initiated the bidding process for sale of up to 75% stake in the airline and the list of final bidders is expected to be known in the second week of May.