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Etihad bids for Jet but adds rider

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Etihad bids for Jet but adds rider

Two unsolicited bids have also been received.

Etihad Airways submitted a last-minute bid to invest in Jet Airways albeit with a rider, as the deadline for the bidding process ended on Friday evening.

"Etihad Airways today confirmed its interest to re-invest in a minority stake in India's Jet Airways, subject to conditions," said a spokesperson for the Gulf carrier which owns a 24 per cent stake in Jet.

The spokesperson said the airline "cannot be expected to be the sole investor, and that, amongst other requirements, additional suitable investors would need to provide the majority of Jet Airways' required recapitalization."

However, Etihad gave no indication whether it was working with any other investors that might take a majority stake in Jet Airways.

SBI Capital Markets, which has been entrusted with the task of carrying out the sale, said in statement that a sealed bid from Etihad Airways has been received and the same will be submitted to lenders for examination.

A few unsolicited offers for Jet Airways have also been received, which the lenders may deliberate on subsequently. The banks are likely to evaluate bids next week, the statement added.

Etihad is only selected bidder to have submitted a qualified bid to invest in the airline. Etihad was among four investors that submitted non-binding expressions of interest for Jet Airways last month.

The others were private equity firms TPG Capital and Indigo Partners and Indian wealth fund National Investment and Infrastructure Fund (NIIF).

SBI has also received two unsolicited, nonbinding bids for Jet Airways, the bank's Chairman Rajnish Kumar told reporters, after a news conference on Friday, adding it had no plans at this time to drag the airline into a bankruptcy process "We've made disproportionate efforts to keep Jet flying," Kumar said.

"A few unsolicited offers have also been received which the lenders may deliberate upon subsequently," SBI Capital Markets said in a statement without giving further details.

SBI had invited binding bids for a stake in the airline, which is saddled with a close to Rs 9,000 crore bank debt. Binding offers were to be submitted by a 6 p.m. deadline on Friday.

Once India's largest private airline, Jet was crippled by mounting losses as it got caught up in a fierce price war with lowcost rivals IndiGo and SpiceJet Ltd and rising jet fuel prices led to a sharp increase in operational costs.

Cash-strapped Jet, which also owes huge sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from April 17 after its lenders, led by SBI, refused to pump in more money.

Analysts are sceptical the sale process will succeed. "The process of bidding and winning isn't so easy," said HDFC Securities analyst Deepak Jasani.

"Day by day, losses and loans are rising at Jet, the more the process is delayed the more the situation becomes irreparable," he said.

Meanwhile, mortgage lender HDFC Ltd has put up for sale crisis-hit Jet Airways' headquarters at the Bandra Kurla Complex in Mumbai to recover outstanding dues to the tune of Rs 414 crore from the debt-ridden airline which has now been grounded.

The airline which at one time had a fleet of 120 planes is down to a mere four planes at the last count. Most of the planes in its fleet were leased and these were grounded as the cash-starved airline failed to pay the rentals.

Jet Airways owned only 16 aircraft, including 10 wide-body Boeing 777-300 ERs but since it could not pay the loan instalments to foreign banks these have also been grounded.

Spicejet is now interested in taking over these planes. Jet Airways prime flight slots in New Delhi and Mumbai are also being given away to rival airlines with Spicejet getting the lion's share.