Jet’s liabilities prevented Etihad from lodging EoI

Mumbai: Etihad Airways PJSC, which owns a 24% stake in Jet Airways (India) Ltd, on Monday said it declined to lodge an expression of interest (EoI) for its grounded partner due to unresolved issues concerning the Mumbai-based airline's liabilities.

The Gulf airline major had, in May, submitted a non-binding conditional expression of interest (EoI) for Jet Airways for picking up minority shareholding. However, among its conditions, Etihad wanted a commitment from banks on additional loans. The company had also sought an exemption from an open offer that could have been triggered by a change in ownership following its investment.

"Etihad remained engaged in the process, but despite the endeavours of everyone involved there remained very significant issues relating to Jet’s previous liabilities," Etihad Airways said in a statement. "Regrettably, in these circumstances, it was neither feasible for nor responsible of Etihad to reinvest in Jet at this time."

In 2013, Etihad Airways acquired a 24% stake in Jet Airways (India) Ltd for $379 million (around Rs2,060 crore then).

This led the Mumbai-based airline to become the first beneficiary of a policy change that allowed foreign airlines to invest in domestic carriers.

"Etihad acquired a 24% stake in Jet in 2013, at a time when Jet needed significant financial support. Since then, Etihad has consistently and constructively sought and advanced solutions to help resolve Jet’s issues," Etihad said in its statement. "But as a minority shareholder, Etihad has had limited capacity to secure required changes."

Jet Airways suspended operations in April due to acute fund crunch.

On 20 June, the Mumbai bench of the National Company Law Tribunal admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC). A consortium of 26 banks led by the State Bank of India had approached the tribunal to recover dues of more than Rs8,500 crore.

Lenders have been trying to sell the cash-strapped airline as a going concern for the past five months.