The Hinduja Group is seeking an 80 percent haircut on the outstanding debt of the
airline, said two people familiar with the discussions, who spoke on condition of
anonymity.
Jet Airways owes its lenders close to Rs 10,000 crore. Also, the group is only interested in a minority stake in Jet Airways and does not intend to be a majority partner, these people said. The Hinduja Group is currently in dialogue with banks and Etihad Airways PJSC, which holds 24 percent stake in the airline.
The discussions are at a preliminary stage and an approval is unlikely, the people quoted above said. Emails were sent to the Hinduja Group and lead lender State Bank of India on Friday morning. The story will be updated with any response. A bidding process for Jet Airways closed earlier this month, with no serious bidders emerging. Partner Etihad Airways offered to retain its 24 percent equity stake in Jet Airways but stopped short of offering any comprehensive resolution plan. This prompted SBI to restart the process to find a majority investor for Jet Airways.
The Hinduja Group, which owns businesses ranging from automobiles to financial services in India, emerged as one possible option. However, banks, led by SBI, are not enthused by the early discussions with the Hinduja Group. An 80 percent haircut on the near Rs 10,000 crore in debt owed the airline would mean a significant hit for banks, the first person quoted above said.
SBI and Punjab National Bank have the highest exposure to the airline at about Rs 2,000 crore each. Besides, if the Hinduja Group picks up a minority share, banks would still have to deal with the headache of finding another investor, the person quoted above added.
24/05/19 Vishwanath Nair/Bloomberg Quint
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Jet Airways owes its lenders close to Rs 10,000 crore. Also, the group is only interested in a minority stake in Jet Airways and does not intend to be a majority partner, these people said. The Hinduja Group is currently in dialogue with banks and Etihad Airways PJSC, which holds 24 percent stake in the airline.
The discussions are at a preliminary stage and an approval is unlikely, the people quoted above said. Emails were sent to the Hinduja Group and lead lender State Bank of India on Friday morning. The story will be updated with any response. A bidding process for Jet Airways closed earlier this month, with no serious bidders emerging. Partner Etihad Airways offered to retain its 24 percent equity stake in Jet Airways but stopped short of offering any comprehensive resolution plan. This prompted SBI to restart the process to find a majority investor for Jet Airways.
The Hinduja Group, which owns businesses ranging from automobiles to financial services in India, emerged as one possible option. However, banks, led by SBI, are not enthused by the early discussions with the Hinduja Group. An 80 percent haircut on the near Rs 10,000 crore in debt owed the airline would mean a significant hit for banks, the first person quoted above said.
SBI and Punjab National Bank have the highest exposure to the airline at about Rs 2,000 crore each. Besides, if the Hinduja Group picks up a minority share, banks would still have to deal with the headache of finding another investor, the person quoted above added.
24/05/19 Vishwanath Nair/Bloomberg Quint
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