Four prospective bidders have been shortlisted for the stake sale.
SBI Capital Markets is said to have shortlisted four prospective bidders for the stake sale in Jet Airways as a part of the debt resolution process. These include TPG Capital, Indigo Partners, Etihad Airways and NIIF. The qualified bidders are expected to submit their binding bids latest by April 30. It is a crucial process for Jet Airways that is battling a number of issues on multiple fronts to stay operational.
Here’s a quick look at the bidders that are hoping to revive the troubled airline:
TPG Capital
The 27-year-old US-based private equity firm has investments in a wide range of sectors from industrials and financial services to healthcare, technology and real estate. Interestingly, it’s first ever major investment was in then-bankrupt Continental Airlines in 1993. The Texas-headquartered airline, in 2013, merged into United Airlines. In 1994, the PE firm created an Asia-dedicated fund-TPG Capital Asia, which is now being led by Puneet Bhatia in India. The firm marked its presence in the country with investments in a number of companies under the Shriram Capital Group. TPG has time and again shown its interest to make it big in the aviation industry across countries but has dropped out of the race on several occasions. It remains to be seen if it will go ahead and bid for the beleaguered airline in India.
Indigo Partners
The Phoenix-based private equity firm that has ample of experience in the aviation industry has been looking to enter the Indian territory. It had earlier shown interest in Kingfisher Airlines and SpiceJet. The firm holds controlling stake in American Frontier Airlines and Chilean JetSmart. It also has stakes in Mexican airline Volaris and European carrier Wizz Air. This year, the firm announced plans to relaunch an ultra-low-cost-carrier Enerjet in Canada. However, its other major deal this year, to invest in WOW Air, was called off in March.
Board meeting over, Naresh Goyal gone, but rescue package remains elusive for Jet Airways
In a drama that moved from the boardroom of Jet Airways headquarters in Mumbai to the corridors of Ministry of Finance in New Delhi, the final act is yet to be played out in the airline’s saga.
Jet is yet to make a statement after its board met on April 16 to discuss the future course for the distressed airline. On April 15, the banks, after a meeting with Jet officials, had refused to provide interim funding to the airline.
The airline was hoping to get about Rs 1,000 crore from the banks, and that would have enabled it to continue operations until a new owner came in. SBI Caps, which is overseeing the bidding process, is expected to announce the shortlisted candidates who can then present bids.
Naresh Goyal, who had submitted an expression of interest, is said to have opted out of the race, after opposition from other suitors, including Etihad Airways.
The Board had few options to consider, and thus may be forced to suspend, at least temporarily, operations of the airline. Jet is operating about 50 flights a day, with seven aircraft. It has suspended international flights till April 18.
It needs immediate funds to pay its employees – including pilots and ground staff – lenders, lessors and vendors.
The company on April 16 wrote to the Prime Minister’s Office, Ministry of Finance and Ministry of Civil Aviation, for help. Officials at the Finance Ministry said that lenders, led by State Bank of India, are working on a revival package.
Jet Airways CEO Vinay Dube also wrote to SBI for an emergency funding of Rs 400 crore.
In a communication to employees later in the day, Dube said: “Subsequent to the meeting of the Jet Airways Board of Directors held earlier today, the Company’s leadership continued its engagement with the Indian lenders (led by State Bank of India). The Company, under the guidance of the Board has reached out to our lead lender, State Bank of India yet again and stressed on the need for urgent funding requirements, critical to the continuation of the operations of our airline.”
“In the said communication, we have highlighted the specific areas that will be immediately impacted, should the funding not be forthcoming. It is our earnest endeavour to keep all lines of communication open with you, such that you continue to be updated on all critical developments,” Dube said in the note.
He assured employees that Jet continues to work proactively with the Indian lenders to provide all the required support, to help resurrect the airline, including working closely with the potential parties that are keen on bidding for the airline.
