Wednesday, 22 May, 2019

India's Jet Airways stake sale extended

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Ginger Lawrence | 13 April, 2019, 12:28

According to bankers, the Supreme Court decision to strike down the Reserve Bank of India's (RBI's) February 12 circular meant that lenders could not acquire control by converting one rupee of debt into 50% equity. However, minutes before the end of the deadline, it was extended.

The consortium of banks has appointed SBI Caps to take out the EoI and conduct the process of their stake sale in the airline. The initial bid document offers between 31.2% and 75% of shares to the new owner of Jet.

This is the second time the refiner has halted fuel supplies to crisis-stricken Jet, which is saddled with over $1.2 billion in debt and owes money to banks, aircraft lessors, suppliers, pilots and others.

"Bidders are required to provide the solvency certificate ... on their letterhead and certified by Managing Director/ Full Time Director / Chief Executive Officer of the bidder or a person holding an equivalent position in the bidder", it noted.

Acute financial crunch has forced the airline to ground three-fourths of its fleet, leading to massive flight cancellations and delaying all payments including salaries.

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Currently, the airline operates 26 aircraft which includes Airbus A330s, Boeing 777s, 737-800 and ATRs to various destinations like London, Toronto, Singapore, Amsterdam, Paris, Bangkok and domestic sectors like Mumbai-Delhi among others.

"Once we restore the much-needed network stability of the airline, our highest priority is to get more planes flying and to pay your salary arrears", Dube said in a communication to employees.

Indian Oil Corporation (IOC) resumed the supply of aviation turbine fuel (ATF) to Jet Airways after the airline made some payment.

"The airline will further update guests with revised timings". Additionally, he met the airline's lenders along with two Ashok Chawla, Jet directors and Nasim Zaidi, former aviation secretary and ex-director general of civil aviation (DGCA), respectively. Abu Dhabi-based Etihad agreed to exit from the ailing airline in stages. SBI Capital Markets has invited bids on behalf of the lenders.

Earlier, SBI chairman Rajnish Kumar had said that lenders did not want to initiate insolvency proceedings against Jet Airways.