Naresh Goyal offers ₹250 crore for Jet Airways’ immediate needs

Naresh Goyal, founder of Jet Airways (India) Ltd, has offered to infuse ₹250 crore of his own funds into the grounded airline in a new twist to protracted attempts to revive the Mumbai-based carrier.

In a letter addressed to Jet Airways’ employees on Monday, Goyal said he had made the funds available to the banks that now control the airline.

Goyal, who stepped down from the board and chairmanship of Jet Airways in April, said he would invest the funds from Jetair Pvt. Ltd, a company that he controls. Mint has reviewed a copy of the letter.

“Since stepping down from our respective positions, Neeta (Goyal) and I have had no role at Jet Airways after having made every possible sacrifice and commitment to ensure that the best interests of our Jet Airways family are served,” Goyal said in his letter to employees, most of whom have not received salaries since January.

Mint had on 14 April reported that Jetair had agreed to provide the airline ₹250 crore as loan collateral, and had also considered investing in the airline at an extraordinary general meeting on 14 January.

Goyal’s latest attempt to placate the banks comes after they rejected a potential bid by him in April to retain control of the carrier citing non-eligibility conditions for an ongoing bidding process.

In March, Goyal was forced to cede control of the airline he had founded more than two decades ago, after Jet Airways, saddled with more than $1 billion in debt, defaulted on payments to banks and aircraft lessors. Jet Airways eventually suspended operations on 17 April.

The sudden grounding of Jet Airways, which was once India’s largest private airline, has forced the Indian government to take steps to address the shortage in flights and minimize disruptions in the domestic civil aviation market. The government has since alloted slots of Jet Airways at domestic airports to other airlines for a period of three months to start new flights.

The consortium of banks has, meanwhile, thrown open a bidding contest to find a new investor that is expected to be completed in the June quarter. Potential investors have until Friday to submit their bids.

Mint reported on 16 April that Etihad Airways PJSC, India’s National Investment and Infrastructure Fund and private equity firms TPG Capital and Indigo Partners had been shortlisted to place binding bids for Jet Airways (India) Ltd.

Three of the four qualified bidders—Etihad Airways, TPG Capital and Indigo Partners—have, however, not signed non-disclosure agreements necessary for conducting due diligence before they can submit final bids, The Economic Times newspaper reported on 2 May, citing people with knowledge of the matter.

Separately, a group of minority shareholders and frequent flyers of Jet Airways have reached out to SBI Capital Markets Ltd, which is running the bidding process, on 25 April to present a proposal to lenders that would revive the airline.

In a letter addressed to SBI Caps, Sankaran Raghunathan, representing the minority shareholders and frequent flyers, said that Jet Airways’ lenders should not entertain any proposal or bid from any party that sought haircut from banks on the debt obligations of the airline, as that would result in a loss for the banks.

SBI and Naresh Goyal did not respond to emailed queries seeking comments until press time on Tuesday.

According to the bidding eligibility conditions, strategic bidders looking to invest in Jet Airways should have a minimum net worth of ₹1,000 crore or at least three years of experience in the aviation sector. For financial investors, the qualifying conditions are minimum assets under management of ₹2,000 crore or at least ₹1,000 crore in committed funds for investment in Indian firms or assets.