Etihad Airways CEO Tony Douglas has also asked SBI to consider buying Etihad’s 50.1% stake in Jet Privilege, the frequent flyer programme of Jet Airways. (Bloomberg)
Etihad Airways CEO Tony Douglas has also asked SBI to consider buying Etihad’s 50.1% stake in Jet Privilege, the frequent flyer programme of Jet Airways. (Bloomberg)

Etihad offers to sell its entire stake in Jet Airways to SBI

  • Etihad Airways CEO Tony Douglas met SBI chairman Rajnish Kumar in Mumbai on 18 March to discuss Jet Airways bailout plan
  • He asked SBI to buy Etihad’s 24% stake at 150 per share, or about 400 crore for the full stake

Mumbai/New Delhi: Etihad Airways PJSC has offered to sell its entire 24% stake in Jet Airways (India) Ltd to State Bank of India (SBI), a person with direct knowledge of the matter said, even as the government held an emergency meeting on Tuesday to discuss the unfolding crisis at the cash-strapped Indian airline.

Etihad chief executive Tony Douglas on Monday met SBI chairman Rajnish Kumar in Mumbai to discuss the Jet Airways bailout plan prepared by a group of lenders.

“Tony Douglas tabled the exit proposal yesterday (18 March). (He has) asked SBI to buy Etihad’s 24% stake at 150 per share, or about 400 crore (for the full stake)," said the person cited above, requesting anonymity.

The person said Douglas has also asked SBI to consider buying Etihad’s 50.1% stake in Jet Privilege Pvt. Ltd, the frequent flyer programme of Jet Airways.

SBI and Jet Airways did not respond to emailed queries.

“As a minority shareholder, Etihad is working closely with Indian lenders, the company and key stakeholders to facilitate a solution for Jet Airways," a spokesperson for Etihad said on email.

Etihad bought its 24% stake in Jet Airways in 2013 for $379 million, or about 2,060 crore at the time.

The Abu Dhabi-based airline’s stake in Jet Privilege has an estimated value of $600 million, the person said, adding that the carrier had also asked SBI to take over the guarantee provided by Etihad for a 1,000 crore external commercial borrowing facility raised by Jet Airways from HSBC Bank, Abu Dhabi, a few years ago. The airline founded by Naresh Goyal recently defaulted on repaying this loan facility.

SBI chairman Rajnish Kumar.
SBI chairman Rajnish Kumar.

On Tuesday, some of Jet Airways’ pilots threatened to go on strike from 1 April unless salary dues were paid by March-end, PTI reported.

The civil aviation ministry, which held an “emergency meeting" to discuss the crisis at the airline, has asked Jet Airways to avoid last-minute flight changes, keep its planes airworthy and take care of customers affected by flight cancellations.

The airline has only 41 planes currently, down from its original fleet of 119 planes.

Jet Airways chairman Naresh Goyal.
Jet Airways chairman Naresh Goyal.

“It is a dynamic situation and there may be further (fleet) attrition in the coming weeks," the ministry said in a statement. Jet Airways has scheduled 985 weekly flights, including 382 international flights, with the current fleet. The Directorate General of Civil Aviation (DGCA) was closely monitoring the situation, the statement said.

With SBI suggesting last week that the Jet Airways bailout plan could be in place within a week, the government has given the lenders a free hand to take a call on the resolution plan, said a government official, requesting anonymity.

On Tuesday, Jet Airways shares fell 3.35% to 229.05 apiece on the BSE while the benchmark Sensex gained 0.70% to end the day at 38,363.47 points.

Close