New Delhi/Mumbai: Lenders of the debt-ridden Jet Airways Monday invited “expression of interest” for stake sale in the airline to recover their dues.
The document issued by the State Bank of India (SBI), the lead lender in the consortium, offered stake up to 75 per cent of the company on a fully diluted basis.
However, it was not known whether ex-Chairman Naresh Goyal or major equity owner Etihad Airways would be selling their stake on a pro-rata basis.
Sources said TPG Capital, private equity firm KKR, Blackstone, Lufthansa, Singapore Airlines and Delta-Air France-KLM are among the companies the lenders approached. A Tata Group spokesperson refused to comment on market speculation.
The EOI document says: “The lenders, pursuant to the guidelines issued by the Reserve Bank of India, are in the process of formulation of a resolution plan for the company, inter alia, involving change in control and management of the company.”
The EoI is meant to provide information about the company to enable interested parties to assess the proposal before submitting bids. EoI can be submitted till 6 pm April 10.
Monday’s development comes after lenders last week expressed intent to pursue bank-led resolution for the airline under existing legal and regulatory framework.
The development assumes significance as the Supreme Court has decided to annul a February 12, 2018, RBI circular on bad debt. The judgement was seen as a major setback for the resolution process.
The consortium said in a statement: “The lenders intend to pursue the bank-Led resolution plan for sale of stake in the company in a time-bound manner under the present legal and regulatory framework and intend to invite expressions of interest.”
According to the lenders’ statement, all efforts will be made for the stake sale and other options may be considered by them, should these efforts not result in an acceptable outcome.
The lenders did not divulge any information about the present funding needs of the airline.
Former chairman of Jet Airways, Naresh Goyal, has said he has cooperated fully and facilitated the bank-led resolution programme for the company.
On March 25, Goyal had stepped down from the board of the airline and ceded majority control to the SBI-led consortium.
Under the debt resolution plan, lenders are to inject working capital of up to Rs 1,500 crore into the airline and convert their debt into equity, to revive the airline and then sell their stake in it.
The airline owes over Rs8,000 crore to lenders, led by the State Bank of India (SBI).
The airline is hard-pressed for funds and without further funding the airline’s fleet size is expected to shrink further. It has already shrunk to 26.
—ians
