Meanwhile, the Bombay high court on Thursday refused to schedule an urgent hearing of a plea filed to “rescue” Jet Airways. “The only way out is to pass a hat around, asking people to put in money for charity. We cannot direct the government to release funds. It is a listed company. Go to the NCLT!” remarked Chief Justice Pradeep Nandrajog. Advocate Mathews Nedumpara, who mentioned the matter, said that the banks — led by SBI — should be directed to release funds for the airline’s operations and the government should intervene to rehabilitate employees who have been left in the lurch.
In a statement released here on Thursday on behalf of lenders, SBI said that banks, after due deliberations, decided that the best way forward for the survival of Jet Airways is to get binding bids from potential investors who have submitted an expression of interest and have been issued bid documents on April 16. “Lenders are reasonably hopeful that the bid process is likely to be successful in determining the fair value of the enterprise in a transparent manner,” the statement said.
Lenders had held back from funding in a bid to force promoter Naresh Goyal to step down and pave the way for a new investor. While private equity investors like TPG and Indigo Partners have shown interest, the lenders have been keen to sell to an airline. Etihad has been best placed because Jet supplies it with international passengers. Besides, Etihad is also a shareholder in Jet Privilege — a loyalty and rewards management company.
Despite having skin in the game, Etihad has been reticent to submit a proposal given the large liabilities run up by the airline. The Abu Dhabi-based carrier has been playing hardball and has been demanding concessions from lenders, which they have been unwilling to provide. The negative net worth of the airline and the Rs 3,500-crore worth cancellations will have to be borne by the new owner. If the government decides to hand over slots to rival airlines in a bid to keep prices in check, Jet could lose further value for the buyer.
The original plan of the lenders to acquire a 50.1% in the airline by converting one rupee of debt into equity was stymied by a Supreme Court order earlier this month, which struck down the February 12, 2018 circular that facilitated such a conversion. Without equity, lenders are looking to sell shares pledged by Goyal who continues to own 51%. Besides this, 24% of shares are held by Etihad.