SBI Seeks Bids For Cash-strapped Jet Airways

SBI is the lead lender to Jet Airways, which has a debt burden of Rs 8,000 crore.

(Photo Courtesy: Jet Airways)

The State Bank of India (SBI) on Monday, 8 April, invited bids for stake sale in ailing Jet Airways.

SBI, which is the lead lender of a consortium of domestic lenders that has extended loans to Jet Airways, is looking for "change in control and management" of the carrier, according to a public notice.

SBI Capital Markets would be assisting and advising the lenders on the bid process. The bids have to be submitted by 10 April.

The lenders' consortium has taken control of the airline under a debt recast plan.

Under the debt resolution plan approved by the Jet Airways' board on 25 March, lenders have taken a majority stake in the airline and are set to infuse Rs 1,500 crore.

Besides, the carrier’s founder and promoter Naresh Goyal as well as his wife Anita Goyal quit the board. The shareholding of Goyals has come down to 25 per cent from 51 percent earlier.

Acute financial crunch has forced the airline to ground aircraft, cancel flights and delay payment of salaries, including to pilots.

Lenders’ Earlier Statement

Amid uncertainty over future of Jet Airways, the consortium of SBI-led lenders last Thursday said bids for selling stake would be invited on 6 April and other options would be explored in case the stake sale efforts do not result in an "acceptable outcome".

After taking stock of the current situation at the airline, which is currently operating less than 30 planes, the lenders said they would pursue resolution plan for the carrier in a time-bound manner under the present legal and regulatory framework.

"The lenders are cognisant that the outcome of efforts of the lenders will depend on the interest shown by the parties on sale of stake in the company," the statement issued by lenders last week said.

“Whilst all efforts will be made for the stake sale by lenders, other options may be considered by the lenders should these efforts not result in an acceptable outcome.”

Lenders’ Statement