Jet Airways Creditors Wait for Takeover Bids as Deadline Looms
Creditors led by State Bank of India had not received any bids for as much as 75 percent of Jet Airways as of Tuesday.
(Bloomberg) -- The fate of debt-laden Jet Airways India Ltd., the country’s oldest surviving private airline, could be determined as soon as a creditor-imposed deadline for takeover bids runs out on Wednesday.
Creditors led by State Bank of India had not received any bids for as much as 75 percent of Jet Airways as of Tuesday, though that doesn’t mean that offers won’t come in on the final day, people familiar with the matter said, asking not to be identified discussing a private matter. Questions abound from potential bidders, including debt levels and how much of a stake will actually be available for sale, the people said.
There’s much at stake beyond the troubled airline, which once represented a cornerstone of the Indian travel market. The deal will be pivotal for creditors seeking to recover more than $1 billion in debt from the carrier, which has posted losses in nine of the past 11 years and had to ground planes amid its liquidity challenges. The fate of Jet Airways, which employs more than 20,000 people, is also crucial to the legacy of Indian Prime Minister Narendra Modi as he faces an election that begins April 11 after holding power for the last five years.
“I am not very optimistic that they will get any investors coming in and with a large part of its fleet grounded," said Jitender Bhargava, aviation expert and former director of Air India. “The future of the airline looks very bleak unless some kind of divine intervention takes place.”
Representative for State Bank of India and Jet Airways declined to comment.
According to the sale process that started on Monday potential buyers for as much as 75 percent stake in the carrier must submit their interest by April 10. After qualified bidders are selected, they will be provided access to company data and bid documentation.
To contact the reporters on this story: Saloni Shukla in Mumbai at sshukla72@bloomberg.net;P R Sanjai in Mumbai at psanjai@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, ;Sam Nagarajan at samnagarajan@bloomberg.net, Young-Sam Cho, Candice Zachariahs
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