Backed by investors in the US and UK, Jet Airways founder Naresh Goyal has re-emerged to place a bid for his former carrier on Friday as the deadline for expressions of interest fell. The airline’s current creditors – led by the State Bank of India (SBI) – were offering between 32.1 and 75 per cent stake in the airline.
US-based firm, Future Trend Capital and the UK’s Adi Partners are reportedly teamed up with Jetair – Goyal’s general sales agency (GSA) that originally created Jet Airways in 1993, according to the Economic Times. But like airline flights in India, the consortium’s express of interest came in late – at 6:08, eight minutes after the deadline.
Should Goyal and the consortium win approval, it would represent a remarkable turnaround for Goyal, who less than a month ago was forced to step down from the board of the financially troubled carrier.
SBI chairman Rajnish Kumar has already made it clear that “nobody is barred from bidding, or taking over the airline” according to the regulations. “It could be financial investor, it could be airline … including Naresh Goyal himself, or Etihad,” Kumar said last month, according to Business Today.
Several other entities have reportedly also submitted expressions of interest in the stake sale, including Etihad Airways, which already owns 24 per cent of Jet Airways and is the second largest stakeholder, TPG Capital and Indigo Partners.
The Gulf carrier has reportedly made it clear that it does not want its stake to touch 25 per cent however, as that would mandate an open offer to minority shareholders of airline according to the country’s takeover legislation. Foreign carrier’s are also limited to a 49 per cent share in a domestic airline.
One of the options to salvage Jet Airways would be to bring in multiple, unconnected investors. “Investments by Etihad Airways, National Investment and Infrastructure Fund, and a private equity fund like TPG Capital or Indigo Partners — with each holding 24 per cent or less in the expanded equity pool — could be a way to avoid an open offer,” says a an unidentified banker cited in the Economic Times article.
Meanwhile, the airline’s operational crisis continues to spiral out of control with all international flights grounded the carrier is operating just six ATR turboprop planes and one B737 on its local routes, as lessors apply to the DGCA to de-register their already grounded planes. Last week the carrier was one of its B777s seized by Worldwide Flight Services (WFS) at Amsterdam Schiphol Airport (AMS) of unpaid fees.
There are also legions of disgruntled employees, many of whom have not received salaries since January. Pilots on Sunday threatened to boycott operations from midnight over unpaid salaries but the strike was called off in the evening in the hope the lenders will agree to release funds in their meeting with the Jet management on Monday.
But already Jet Airways pilots and engineers have started joining other carriers, including SpiceJet, with pay cuts of up to 50 per cent the report says.