A 49.9% stake in Jet Privilege Pvt. Ltd (JPPL), the frequent-flyer loyalty programme of Jet Airways (India) Ltd, is likely to be the key attraction for those bidding for the grounded airline, which was referred to a bankruptcy court last month.

Lenders to Jet Airways expect an attractive valuation for JPPL, which has remained profitable for the past few years despite a cash crunch faced by Jet Airways that forced it to curtail flights for several months before halting operations in April, two people directly aware of the ongoing discussions said on the condition of anonymity.

Financial creditors, which includes banks, have claimed 10,231 crore, while 2,400 operational creditors have claimed 12,372 crore from Jet Airways.

“The shares held by Jet Airways in JPPL will be transferred to the successful bidder," said one of the two people cited above, adding that JPPL is likely to be an attractive asset for potential bidders of Jet Airways. “Lenders expect bidders to play a significant premium for the JPPL stake in their overall bid for Jet Airways," the person added.

JPPL, which is 50.1% owned by Abu Dhabi-based Etihad Airways PJSC, is a profitable entity, with about 839 crore of cash in hand, at the end of 2018, according to the document issued by the resolution professional on Saturday seeking expressions of interest (EoI) from potential bidders.

Mint had in April reported that JPPL’s customer base has jumped from 7.3 million to 9 million in the past year. Reward-point sales have risen 20% to 35 billion JP Miles during the period, improving opportunities for the carrier’s shareholders to monetize their value.

JPPL was incorporated in 2012 as a wholly-owned unit of Jet Airways, but was hived off as an independent entity in 2014 after Etihad took a majority stake for $150 million, valuing the firm at $300 million. Etihad’s investment in JPPL was part of its overall $600 million investment in the airline announced in April 2013.

“Several private equity firms had recently expressed their interest to pick up a portion of Jet Airways’ stake in JPPL. Moelis is acting as the investment banker for the proposed deal," Manish Dureja, managing director and CEO, JPPL said in an April interview.

On Point Loyalty, a global management consultancy focused on airline loyalty programmes, valued JPPL at $1.13 billion (about 7,300 crore) last year, based on the average rupee exchange rate in November.

Moneycontrol.com reported last week that a TPG Capital-led consortium is evaluating a potential bid for Jet Airways under the IBC (Insolvency and Bankruptcy Code), citing unidentified people. The report said the deal hinges on the lenders making JPPL a party to the bidding process.

“JPPL will definitely add value to Jet Airways. But, Jet Airways will have to be revived for someone to take advantage of JPPL," said Mark Martin, chief executive of aviation consultancy firm Martin Consulting LLC.

Meanwhile, the resolution professional (RP) appointed by lenders of Jet Airways has invited EoIs from prospective bidders by 3 August.

The RP, Grant Thornton India’s Ashish Chhawchharia, has set 6 August as the date for issuing a provisional list of prospective resolution applicants, and 11 August as the last date of submission of objections. The final list of prospective resolution applicants will be issued on 14 August, while the final date for submission of resolution plans of these applicants will be 5 September.

To be eligible for bidding for Jet Airways, a strategic investor should have a minimum net worth of 1,000 crore while a financial investor should have Minimum Asset Under Management (AUM) of 2,000 crore or have funds worth at least 1,000 crore immediately available for investment.

Up for sale are few of the remaining assets of the airline, including a dozen planes comprising 6 Boeing 777, 3 Boeing 737, and 3 Airbus 330. The company owns the three Boeing 737 planes, which have a list price of about $80 million to $90 million each. Rest of the planes are financed by lenders.

Jet Airways grounded its operations on 18 April amid an acute fund crunch. On 20 June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted the carrier under the IBC after lenders referred it to the bankruptcy tribunal. A consortium of 26 banks led by the State Bank of India, had approached the tribunal to recover dues of over 8,500 crore.

The lenders had been trying to sell the beleaguered airline as a going concern for the past five months. The NCLT will hear the insolvency case and the progress report of the RP on Tuesday.

The Committee of Creditors (CoC) of Jet Airways had last week approved an interim funding of $10 million (about 69 crore) for the airline, which will be used for the corporate insolvency resolution process.