Air France-KLM, Delta Air Lines, Lufthansa AG and Blackstone Group said to be in fray to buy a stake in Jet Airways
On offer is a controlling interest, defined as 31.2-75% of the equity capital in Jet Airways to save it from bankruptcy
Mumbai: Bankers to debt-laden Jet Airways (India) Ltd, led by State Bank of India (SBI) have approached foreign airlines—including Air France-KLM, Delta Air Lines and Deutsche Lufthansa AG—and buyout firms such as Blackstone Group LP, offering them as much as 75% of the Indian airline in a bid to save it from bankruptcy, said a person directly aware of the developments.
For financial investors, qualifying conditions are minimum assets under management (AUM) of ₹2,000 crore or at least ₹1,000 crore in committed funds for investment in Indian firms or assets, according to the expression of interest document that was made available to prospective bidders and reviewed by Mint. Potential bidders must submit their interest by Wednesday.
A clearer picture on the bidders would emerge only after the close of bidding, the person said, requesting anonymity.
On offer is a controlling interest, defined as 31.2-75% of the equity capital, in India’s oldest surviving airline outside government control, the document said.
Analysts said Jet Airways could generate robust investor interest.
“This is a good opportunity for a player seeking to enter the Indian aviation market or is already there and wants to grow inorganically," said Dhiraj Mathur, who was until recently a partner and leader of aerospace and defence at PwC India.
A successful transaction will, however, depend on the valuation of the asset and the complexity of the Jet Airways stake sale, said Hetal Gandhi, director at Crisil Research.
The lenders had in February decided to convert a portion of the airline’s debt into equity by agreeing to take a 50.5% stake in Jet Airways, nominate two members to its board and make a cash infusion of about ₹1,500 crore into the airline. But the lenders are yet to convert their debt into equity.
Industry executives Mint spoke with said some private equity investors and sovereign wealth funds might find Jet Airways an attractive investment. “With the founder stepping down from the board, the stake sale process of Jet Airways could attract interest from a lot of interested parties, including airlines, PE funds as well of sovereign wealth funds," said an executive with a rival airline, who didn’t want to be named.
“Whoever gets the airline will have serious work ahead to restore confidence in the brand, which has taken a beating in the past few months," the person added.
On 25 March, Naresh Goyal and his wife Anita stepped down from the airline’s board of directors. Naresh Goyal also ceased to be the chairman.
On Monday, Jet Airways shares rose 3.1% to ₹264.1 apiece on the BSE while the benchmark Sensex fell 0.42% to 38,700.53 points.
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