Mumbai: The deal to rescue Jet Airways has hit an air pocket. Lenders have told Jet’s strategic partner Etihad Airways that if it is unable to accept the terms to revive the troubled airline, it should exit so that a new investor can be brought in.
Meanwhile, Jet has cancelled all flights to Etihad’s hub in Abu Dhabi, said two people in the know. The destination became Jet’s hub after it sold stake to the Gulf carrier in 2013. One of them said it was due to shortage of aircraft but it also underlines souring of talks between the two parties.
Etihad, saddled with losses and unsure of the resolution plan and its probable outcome, is understood to have said that it could exit at a price of Rs 150 a share.
“This could well be pressure tactics but it has not gone down well with the government and the National Investment and Infrastructure Fund (NIIF), which was planning to invest. But the question is, where is the buyer even if Etihad offers to sell its stake?” said a person familiar with the developments.
Etihad owns 24% of Jet, which closed at Rs 234.95 on Friday on the BSE. Bankers and the Etihad management have put forth their views just ahead of a March 18 deadline cited by Jet founder chairman Naresh Goyal to employees for a decisive update on the revival plan. An Etihad team will be coming to Mumbai this week to discuss the matter, which is heading toward breaking point, according to the people cited above.
Etihad is yet to chip in with the required contribution of Rs 750 crore. Lenders, led by State Bank of India, are ready to infuse a like amount as ‘priority debt’ to keep the airline flying for the next six months. The Abu Dhabi-based carrier is said to have approached the UAE Federal National Council before taking a final decision, said a second person in the know. There was no response from Etihad to ET’s emailed questionnaire till the time of going to press.
18/03/19 Anirban Chowdhury/Economic Times
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Meanwhile, Jet has cancelled all flights to Etihad’s hub in Abu Dhabi, said two people in the know. The destination became Jet’s hub after it sold stake to the Gulf carrier in 2013. One of them said it was due to shortage of aircraft but it also underlines souring of talks between the two parties.
Etihad, saddled with losses and unsure of the resolution plan and its probable outcome, is understood to have said that it could exit at a price of Rs 150 a share.
“This could well be pressure tactics but it has not gone down well with the government and the National Investment and Infrastructure Fund (NIIF), which was planning to invest. But the question is, where is the buyer even if Etihad offers to sell its stake?” said a person familiar with the developments.
Etihad owns 24% of Jet, which closed at Rs 234.95 on Friday on the BSE. Bankers and the Etihad management have put forth their views just ahead of a March 18 deadline cited by Jet founder chairman Naresh Goyal to employees for a decisive update on the revival plan. An Etihad team will be coming to Mumbai this week to discuss the matter, which is heading toward breaking point, according to the people cited above.
Etihad is yet to chip in with the required contribution of Rs 750 crore. Lenders, led by State Bank of India, are ready to infuse a like amount as ‘priority debt’ to keep the airline flying for the next six months. The Abu Dhabi-based carrier is said to have approached the UAE Federal National Council before taking a final decision, said a second person in the know. There was no response from Etihad to ET’s emailed questionnaire till the time of going to press.
18/03/19 Anirban Chowdhury/Economic Times
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