Etihad Makes Sole, but Conditional, Offer for Jet Airways

After bidding for financially troubled Indian carrier Jet Airways officially closed on Friday last week, it looks like the Abu Dhabi-based carrier Etihad Airways, which already holds a 24% stake in Jet, will be the only party bidding for the airline, be it that it is a conditional offer.

Etihad submitted its bid warning that it cannot be expected to be the sole investor, and that the bulk of the recapitalisation requirements will have to depend on other investors.
The Economic Times (ET) quoted an unnamed person close to the development as saying that “Etihad has made it clear that it’s not up to it to find a partner. It’s the responsibility of the banks that are running the process.” Lenders, who had called for bids last month, were relieved as the 6 pm deadline on Friday ended with Etihad’s offer.

Search for additional investors might go on
The bankers had last month shortlisted four investors, including Etihad, and were hoping the National Investment and Infrastructure Fund (NIIF) would join the process. But in the end, they were left with one serious bid and two unsolicited bids. “This is our last hope,” a banker close to the developments said late Friday evening.
Officials of State Bank of India will meet on Monday to consider Etihad’s offer, and it appears the search for another investor (or investors) may resume given that Etihad only wants to make a limited investment to retain its stake at 24%.
According to the ET report, a spokesperson for Etihad said the airline “cannot be expected to be the sole investor, and that, amongst other requirements, additional suitable investors would need to provide the majority of Jet Airways’ required recapitalization.”

Etihad demands Jet majority owner Goyal to go
The ET report noted that in the past weeks, lenders and Jet Airways' management, including founder Naresh Goyal, have held talks with several prospective investors, including the Tatas, but interest has been lukewarm. There were rumours of the lenders approaching the Hinduja Group. But a person close to the development said the conglomerate has neither done any due diligence nor expressed any interest in Jet Airways. Goyal’s resignation from the board in March also did not revive interest though TPG Capital, Indigo Partners and NIIF submitted expressions of interest in early April and were shortlisted.
Jet is now 51% owned by Goyal, 24% by Etihad and the rest by the public. Goyal has pledged more than 31% with lenders but retains the rest. A potential stumbling block in the entire process is that one of Etihad’s key conditions is Goyal’s complete exit from the airline.

Four Jet offices sealed
Meanwhile, media reports said that the Airports Authority of India has sealed four of Jet’s offices at Indore, Amritsar, Ahmedabad and Udaipur. It has also taken off Jet’s hoardings at the Chennai airport and asked the airline’s staff to empty lockers at Kolkata airport.
Separately, the Bureau of Civil Aviation Security has refused to give airport entry passes to Jet’s staff at 15 airports, including Ahmedabad, Indore, Bhavnagar, Bhuj, Bhopal and Gwalior.

Nol van Fenema