Home >Companies >News >Jet Airways employees bid may be heard as others waver

Mumbai: A bid being stitched together by pilots of the grounded Jet Airways India Ltd may get a hearing if no binding offers emerge from the four potential investors currently in the race, people with knowledge of the matter said.

Lenders led by State Bank of India have asked a group of airline employees, seeking to make a formal proposal, to wait to see who remains in the race after a Friday deadline lapses, the people said, asking not to be identified as the information is private. SBI Capital Markets Ltd, which is advising Jet Airways’s lenders, has received at least three unsolicited approaches, one of the people said.

Etihad Airways PJSC, India’s National Investment and Infrastructure Fund and private equity firms TPG Capital and Indigo Partners have been shortlisted as potential investors. Interest in the carrier waned after Jet was grounded in April and some of its landing and parking slots were temporarily allotted to rivals, the Economic Times reported.

Any investors in the debt-ravaged Jet Airways must weigh the sector’s growth prospects against India’s high jet-fuel prices and a crushing fare war worsened by the entry of no-frills carriers. The market, which saw 54 consecutive months of double-digit percentage passenger growth till February, is notoriously difficult to make money in. A staff-led bid would be rare though not without precedent. In a letter to State Bank of India last month, the group said they would model their efforts on employee-led turnarounds like that of United Airlines in 1994.

The group has secured a commitment of about $430 million from external investors and is looking at tying up a further $250 million, people involved in the discussions said, without identifying the investors. Employees will be given a stock ownership plan as part of the management buyout, they said.

Both Jet Airways and SBI Capital declined to comment.

State Bank of India — the top lender to Jet Airways — said the burden of reversing the grounded carrier’s negative net worth before it can fly again is the biggest challenge for any potential investor. Once India’s biggest airline by market value, Jet Airways has been a victim of a budget airline boom in the fiercely competitive market in the South Asian nation, where carriers offer base fare of as low as 1 cent to lure first time flyers.

Also read: Govt may order SFIO probe into Jet over fund diversion charges

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed

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