Attaching too many riders for infusing funds into grounded Jet Airways, the Abu Dhabi-based Etihad has put the onus of reviving the airline on lenders led by State Bank of India (SBI).
Besides offering a meagre fund infusion of Rs 1,700 crore, the Gulf carrier wants the lenders to find a majority buyer and exemption from making open offer in case its stake breaches 26 per cent mark. Etihad also wants a one-time settlement by banks with operational creditors.
"Banks had earlier promised to provide Rs 1,500 crore but the money never came. Further, Etihad can not be a majority owner in Jet Airways. There are other issues as well. So, it is playing safe," said an industry expert wishing not to be named.
Another senior executive said that the Etihad proposal would remain a non-starter given the kinds of commitment it has sought from banks.
"Going by the current offer, it may well be the end of road for Jet Airways," he said.
The fast value erosion of Jet airways has also made Etihad a reluctant and uninterested investor.
IANS had first reported on May 10 that the stake sale process initiated by SBI-led lenders for grounded Jet Airways would unlikely get any "serious bid" from investors and public sector banks may be looking at massive write-off of loans.
"There is not much value left in Jet Airways. Most of its slots have gone, pilots have left and planes being de-registered. I don't expect any serious bid. Banks are going to lose most of their money in Jet," an industry insider had told IANS.
Run out of cash, Jet Airways suspended its operations on April 17. Subsequent to this, hundreds of employees have left the carrier to join rival companies. Its aircraft are also being gradually de-registered. These events have added to growing uncertainty about airline's revival.
Lenders of Jet Airways led by SBI are currently in the process of selling the airline to recover their dues of over Rs 8,400 crore. Private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways had been shortlisted to submit their bids after they gave their EoIs.
On May 10. the last date for submitting the binding bids, only Etihad gave its offer and that too in the eleventh hour. The other two bids for the airline were unsolicited.
(Nirbhay Kumar can be contacted at firstname.lastname@example.org)