Etihad makes dramatic U-turn with intention to raise stake in ailing Jet Airways

Reuters

  • As the deadline for bids to purchase a stake in Jet Airways has been extended till April 12th, the airline’s creditors have reportedly received a bid Etihad, which is the struggling carrier’s UAE-based partner.
  • Etihad has made a formal offer to increase its 24% stake in Jet Airways.
  • Jet’s creditors have reportedly seen interest from a number of parties, including Indigo and TPG Capital, for a stake of anywhere between 31% and 75% in the airline.

As the deadline for bids to purchase a stake in Jet Airways has been extended till April 12th, the airline’s creditors have reportedly received a bid from an interesting source: Etihad, which is the struggling carrier’s UAE-based partner.

Etihad has made a formal offer to increase its 24% stake in Jet Airways, according to an ET report citing sources.

In fact, the carrier submitted an expression of interest, ending months of turmoil for Jet’s lender - who have been intent on ceding operational control to Etihad amid the departure of Jet promoter Naresh Goyal.

However, it is yet to be determined whether Etihad will take a majority stake in the airline. Jet’s creditors have reportedly seen interest from a number of parties, including Indigo and TPG Capital, for a stake of anywhere between 31% and 75% in the airline.

Either way, Etihad’s move marks a dramatic about-turn. Just a few weeks ago, Etihad had made an offer to sell State Bank of India, Jet’s largest creditor, its entire 24% stake in the airline.

Not only did the UAE-based carrier plan to sell its 24% stake in the airline and its 50.1% stake in Jet Privilege, it also wants its existing loan guarantee for Jet’s $140 million loan from HSBC Dubai to be taken over by SBI.

Jet Airways’ resolution plan has been stalled in recent months over disagreements between Etihad and Jet’s consortium of creditors - led by State Bank of India. Etihad has been reluctant to pump more money into the failing airline and increase its 24% stake.


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