The story has been updated based on information received after the official closure of the bid deadline, which had been set for 6 p.m. on Wednesday.
Lenders to Jet Airways (India) Ltd. extended the deadline for submission of an Expression of Interest in the airline, minutes before it ran out. This was done in order to “allow better participation in the process,” said a statement issued by SBI Capital Markets Ltd., the investment bank in charge of the sale process.
“...we are in receipt of some EoIs and some more persons have expressed desire to participate if additional time is provided,” the statement said. The investment bank did not specify the number of EoIs received. BloombergQuint had earlier reported that no bid had been received before the original deadline expired.
Shortly before the deadline was set to end, SBI Capital Markets said that the last date to submit queries is being extended to April 11 and the final date for submitting EOIs is now April 12. The investment banking firm said that bidders can submit their interest over email, but hard copies of the EOI, along with supporting documents, would need to be submitted by April 16.
SBI and SBI Capital also issued clarifications on Wednesday evening, allowing bidders to restructure debt. The revised terms “allow interested bidders to take over management control of Jet Airways or restructure existing debt of the company by issuing fresh loans or taking over equity pledged with lenders,” the clarifications said.
BloombergQuint had earlier reported that financial investors including TPG Capital, KKR and Blackstone as well as strategic investors like Deutsche Lufthansa AG, Swiss International Air Lines AG and Singapore Airlines Ltd. had begun the process of identifying consultants to conduct due diligence of Jet Airways. These companies had preliminary conversations with SBI on the potential investment.
Jet Airways has been dealing with a severe liquidity crisis, which came to a head at the start of this year when the airline defaulted on its dues. A bank-led resolution plan approved last month involved lenders holding 50 percent equity in the airline. At the time the plan was approved, SBI chairman Rajnish Kumar told BloombergQuint that lenders hope to exit the investment within two months by end of May.
Lenders also approved a fresh credit line of Rs 1,500 crore for the airline. However, these funds are yet to be released as lenders want collateral in the form of shares held by Jet Airways’ promoter Naresh Goyal and international partner Etihad Airways PJSC.
Meanwhile, promoter Naresh Goyal has stepped down from his position as chairman of the floundering airline and has also exited the board. In a letter to employees and customers last week, Goyal said that he has agreed to give up all his interests in Jet Airways for lenders to move ahead with the resolution plan.
With payments delayed to lessors and salaries to employees overdue, the airline’s operations have been badly impacted. Jet Airways’ fleet has been reduced to 28 planes and the pilots union has threatened legal action. The Rs 1,500 crore lifeline due to be released by lenders is likely to be first used to pay lessors and employees, which will help regularise operations.
Jet Airways has outstanding debt of over Rs 10,000 crore. SBI and Punjab National Bank have an exposure worth about Rs 2,000 crore each. Other lenders to the airline include ICICI Bank, IDBI Bank, Bank of India, Yes Bank, Canara Bank, Syndicate Bank and Indian Overseas Bank.
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