Etihad Airways, Hinduja Group Unlikely To Submit Expression of Interest By Aug 3 Deadline: Jet Airways

Etihad Airways and the Hinduja Group are likely to not submit the expression interest (Eol) for Jet Airways by August 3 deadline and may prefer to wait a bit longer before making their interest official.

Sources told Moneycontrol  that the two partners, who were the only suitors in the bidding process before Jet Airways was taken to the insolvency court, may consider entering at a later stage based on internal advice.

An executive from the industry added that instead of bidding for Jet Airways, Etihad Airways is considering monetising assets it holds in the Indian airline. The assets include airport slots and its stake in Jet Privilege Pvt: the loyalty and rewards management company.

In response to Moneycontrol’s query, an Etihad Airways spokesperson said:

“It would be inappropriate of Etihad Airways to comment on this issue, which is still the subject of a formal process.

“We will advise our position through appropriate channels ahead of Saturday’s deadline.”

 While agencies reported that Jet Airways has received interest from four bidders, Moneycontrol independently learned that an NRI investor, backed by investors, is likely to submit an EoI on August 2.

“Depending on the response, the lenders may take a call on extending the deadline beyond August 3,” an executive added.

The rethink from Etihad Airways and the Hinduja Group comes after it emerged earlier in the week, that AdiGro Aviation and a consortium of Jet Airways employees are also having second thoughts on their collective bid for the airline.

Jet Airways had suspended its operations in April, and a bidding process managed by SBI Capital Markets had seen only Etihad Airways and Hinduja Group envisaging interest. But the deal couldn’t go through as the suitors had placed several conditions.  The lenders consequently took the airline to the insolvency court.

Asset sale Etihad Airways has three slots at London’s Heathrow airport. “The company is hoping to sell three slots, each valued at $35 million. Additionally, it also hold a 50.1 percent stake in the Jet Privilege programme,” said a senior executive.

Before suspending its operations, Jet Airways was trying to raise money by selling stake in Jet Privilege. Though it had received interest from private equity players, differences over valuation had led to a stalemate. 

 However, an official said that PEs continue to express interest. 

 The possibility of selling the asset will increase if lenders fail to get a suitor, who wants to acquire Jet Airways as a complete unit. In this scenario, banks could choose to sell the airline’s assets individually. 

Jet Airways is now left with 14 aircraft. The lenders could choose to sell them to Indian airlines, including Vistara and SpiceJet, who have already leased some of its planes earlier. 

Jet Airways originally had a fleet of about 120 planes, but after defaulting on payments to leasing companies most of these were de-registered.

Aviation, Biz, Business