‘Jet unlikely to get serious bid, banks stare at massive loan write-offs’

By Nirbhay Kumar

New Delhi, May 10 (IANS) The stake sale process initiated by State Bank of India-led lenders for the grounded Jet Airways is unlikely to get any "serious bid" from investors and public sector banks may be looking at massive write-off of loans, aviation industry sources said.

"There is not much value left in Jet Airways. Most of its slots have gone, pilots have left and planes are being de-registered. I don't expect any serious bid. Banks are going to lose most of their money in Jet," an industry insider told IANS.

The deadline for submitting bids for Jet Airways is May 10.

Out of cash, Jet Airways suspended operations on April 17. Hundreds of employees have quit the carrier to join rival companies. Its aircraft are also being gradually de-registered. These events have added to growing uncertainty about the airline's revival.

Lenders of Jet Airways led by SBI are currently in the process of selling the airline to recover their dues of over Rs 8,400 crore.

Private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways had been shortlisted to submit their bids after they gave their expression of interest (EOIs).

With the deadline for bidding for the grounded airline coming to an end on Friday, all eyes are on prospective investors especially the Abu Dhabi-based Etihad which holds 24 per cent stake in the carrier.

While some of the aviation experts have raised concerns on the government's decision to allot Jet's domestic slots and international traffic rights to rival airlines, suggesting it will impact investor sentiment, a few industry insiders do expect surprise bidding in the final few hours.

"Anything can happen. Wait till the final hours of the bidding deadline," said a top industry executive.

After the government decided to re-allocate Jet Airways' slots and traffic rights to local carriers, state-run Airports Authority of India (AAI) ordered to stop billing the carrier and directed concerned officials to take over the space rented out to the grounded airline.

"Besides taking over the office space given to Jet Airways, we are also in the process of encashing their bank guarantee," said an airport director of AAI.

(Nirbhay Kumar can be contacted at nirbhay.k@ians.in)