Mumbai/New Delhi: To stave off any haircut in Jet Airways, the lenders of the company have already started approaching prospective investors, informed sources said on Friday.
Accordingly, the lenders led by the State Bank of India (SBI) have approached various prospective buyers from conglomerates to a global private equity firm for sale of their stake in the financially challenged airline.
Sources said that Tata Group, TPG Capital and Delta-Air France-KLM are among the companies approached by the lenders. When contacted, a Tata Group spokesperson, however, said: “We don’t comment on market speculation.” “Lenders are very serious about their exposure to Jet and how to come out of the situation. They may have given interim relief but there is no surety that the company won’t go into the IBC (Insolvency and Bankruptcy Code) process,” a source close to the development told IANS.
Corroborating the first source, another industry insider said: “Initial feelers have been sent. This is a standard procedure but talks are in a preliminary stage.” “The lenders are scouting for companies that can not only give them an exit but also sustain the size of the airline. Thus far, an Indian diversified conglomerate, global PE fund house and even other global airline companies have been approached through various channels.” However, both sources did not divulge any further details of these prospective buyers.
The development assumes significance since the consortium of banks has appointed SBI Caps to take out the EoI (Expression of Interest) and conduct the process of their stake sale in the airline.
It is expected that Jet’s share sale to new investors will be completed in the June quarter.
Last Monday, Jet Airways promoter and Chairman Naresh Goyal stepped down from the board of the airline and ceded majority control to the SBI-led consortium.
Now the lenders, after injecting up to Rs 1,500 crore working capital into the airline and converting their debt into equity, would try to revive Jet Airways and sell it by June.
The airline owes over Rs 8,000 crore to lenders led by the SBI.
Under the lenders-initiated resolution plan, the airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner.
The move will also see Jet re-deploy several of its grounded aircraft back into its network.
Further, the company has also converted lenders’ debt into equity through the issuance of 11.4 crore equity shares to the lenders’ consortium.
“As part of the resolution plan, the lenders will also begin the process of sale or issue of shares to new investors which is expected to be completed in the June quarter,” Jet said in a statement on Monday.
An interim management committee has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey and Co.