Tuesday, April 09, 2019

TPG Capital, Etihad, NIIF likely to bid for cash-strapped Jet Airways

New Delhi/Mumbai: Abu-Dhabi based Etihad Airways, a 24 per cent shareholder in Jet Airways, is evaluating its options to participate in a pre-bid process for the troubled airline as part of a bank-led resolution plan, sources in the know said.
Etihad, which had recently indicated to Jet lenders that it wanted to sell its stake in the airline founded by Naresh Goyal more than 25 years ago, is yet to confirm if it’s interested, keeping the stakeholders guessing.
The stake sale process of Jet kicked off on Monday, two days after its scheduled opening. Potential bidders have time only till Wednesday evening to submit their expressions of interest (EoIs).

Besides Etihad, there are other potential bidders, too. San Francisco-based private equity investment firm TPG Capital, with an estimated $75 billion, is in the race to bid for Jet Airways, which is left with a fifth of its original fleet and has an accumulated debt of over Rs 8,500 crore. Atlanta-based airline Delta is in the reckoning as well.

A consortium arrangement between Delta and TPG has not been ruled out. TPG declined to comment on its interest, and a spokesperson of Delta said the company did not comment on speculation.

National Investment and Infrastructure Fund (NIIF), India’s first sovereign wealth fund, is yet another entity which could possibly invest in Jet to rescue the airline. NIIF can skip the EoI stage and straight bid for Jet later.

Ahead of the Lok Sabha elections starting on April 11, the government doesn’t want Jet, with more than 20,000 employees, to go down. In that backdrop, lenders’ consortium, led by State Bank of India (SBI), has gone all out to work out a resolution plan for the private airline despite several legal hurdles.
Originally, lenders were to receive 114 million shares in the airline and offer them for sale but now the plan has been stalled after a Supreme Court judgment last week.

According to the EoI document issued on Monday, an acquirer (of Jet Airways) will have to take at least 35.4 million shares equalling 31.2 per cent stake in the airline. These represent shares pledged by the airline's promoter and former chairman Naresh Goyal, banking sources said. The acquirer can take a maximum of 85.1 million shares equal to 75 per cent control.
09/04/19 Surajeet Das Gupta Arindam Majumder & Aneesh Phadnis/Business Standard