London-based Hinduja Group has reportedly decided to halt negotiations for buying a stake in now-grounded Jet Airways while Abu Dhabi-based Etihad Airways has put its plan on hold to invest further, a media report said.
Promoters of Hinduja Group expressed concerns over the ongoing government investigations into Jet Airways and insolvency pleas submitted by its creditors, Mint reported, citing a source familiar with the matter.
Meanwhile, shares of Jet Airways crashed to record lows on Tuesday, after the report that Hinduja Group and Etihad Airways may not invest in the cash-strapped airline which was forced to stop all flight operations nearly two months ago.
Jet Airways shares, which had shed nearly 69 percent in one year as of Monday's close, slumped as much as 14.8 percent to an all-time low of Rs 106.3.
Middle Eastern carrier Etihad Airways, which owns nearly 24 percent stake in Jet Airways, had submitted a bid for the Indian airline last month, while family-run Hinduja Group was said to be considering putting in an offer.
Jet Airways and Hinduja did not comment on the matter, while Etihad, and SBI Capital Markets, the unit of State Bank of India (SBI) overseeing the sale of the stricken carrier, were not immediately available for comment, Reuters said.
Meanwhile, in a major setback to the lenders' revival/sale plan of the grounded Jet Airways, two operational creditors " Shaman Wheels and Gaggar Enterprises " on Monday moved the NCLT seeking bankruptcy proceedings against the airline.
The tribunal issued notices to Jet Airways and banks which own the airline now and posted the matter for further hearing on 13 June when it will decide on admitting or rejecting the bankruptcy pleas.
Jet Airways owes more than Rs 8,000 crore to a consortium of banks led by the State Bank of India, which now run the airline, while it has a much larger debt pile by way of accumulated losses to the tune of Rs 13,000 crore and vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore.
The banks have appointed SBI Capital Markets as the investment banker to find an investor to scout an investor for the company.
SpiceJet chief Ajay Singh last week said the failure of Jet Airways should be a "wake up call" for the aviation industry and at least part of the blame should be at the doorstep of the policymakers as the cost structure is high.
Noting that the grounding of Jet Airways was "very sad", Singh said that internal factors and high costs were among the reasons for its failure.
"Jet Airways grounding is something which is very sad and it should be a wake up for all of us in the aviation sector and the policymakers. I think Jet Airways was an iconic brand, and at least part of the blame for its failure has to be at the doorstep of the policymakers.
"...High-cost structure which is being imposed on aviation has certainly led to its downfall and of course, internal factors. The fact that Jet had a cost structure which was probably uncompetitive and as airlines came, it became tough to get yield commensurate with cost structure," he told PTI in an interview.
With agency inputs