Lenders of Jet Airways led by State Bank of India (SBI) will invite bids to sell their 50.1 per cent stake in the cash-strapped airline from April 6 to 9, with an intention to "pursue the bank-led resolution plan for sale of stake in the company in a time-bound manner under the present legal and regulatory framework", the banks said in a statement on Thursday.
The decision was taken following a three-hour meeting at SBI's head office in the capital Thursday evening between Jet Airways management and the lenders. Following the meeting-which was chaired by SBI Chairman Rajnish Kumar, who earlier in the day met several government officials in the finance and civil aviation ministries-Civil Aviation Ministry officials were apprised of the development.
"The lenders of Jet Airways (India) Limited met today to take stock of the current situation of the company," the statement said. "The lenders are cognizant that the outcome of the efforts of the lenders will depend on the interest shown by the parties on sale of stake in the company … Whilst all efforts will be made for the stake sale by the lenders, other options may be considered by the lenders should these efforts not result in an acceptable outcome," it added.
SBI is the lead lender to Jet Airways, which has a debt burden of more than Rs 8,000 crore.
On Wednesday, Naresh Goyal, founder and former chairman of the airline, said he had agreed to every term and condition laid down by lenders to ensure timely release of funds for the airline.
On March 25, the airline's board approved a debt-resolution plan under which the lenders took control of the airline and also were to make an immediate fund infusion of Rs 1,500 crore. The airline, which is undergoing financial stress, has grounded a majority of its fleet due to its inability to pay rentals to its lessors.
On Thursday, Civil Aviation Secretary Pradeep Singh Kharola said the airline was operating 26 aircraft-two fewer than what it was on Wednesday.
Grounding of planes has also made the airline operate on a curtailed schedule and lose prime slots in a congested airport like Mumbai as a result. Due to Jet vacating a number of slots in Mumbai, its rival airlines have added new flights from Mumbai.
Tata-Singapore Airlines joint-venture Vistara Thursday said it has added 14 new flights to its summer schedule, including five frequencies on the trunk route of Mumbai-Bengaluru, and one frequency each on Mumbai-Kolkata and Mumbai-Hyderabad. As per sources, Tata Group's low-cost joint venture airline AirAsia India is also expected to announce new flights from Mumbai.
Even as the reallocation of slots comes as a relief for airlines looking to add capacity from a congested airport, sectoral watchers believe that unless the reallocation is on a temporary basis and the slots will be returned to Jet Airways once it adds capacity, the development could impact Jet's sale process. "Currently, what Jet brings to the table is slots at major airports and if it loses these then there's nothing to bid for given that its aircraft are on lease," said one airline executive.
Kharola said that Jet Airways reiterated on Thursday that it will fly 75 aircraft by the end of April.