Lenders hope for the success of Jet’s stake sale process that has attracted four eligible bidders —TPG Capital, Indigo Partners, Etihad Airways and the National Investment and Infrastructure Fund (NIIF). Shortlisted bidders will have to offer bids by May 10.
Dalal Street witnessed another beat down of the share price of Jet Airways as the scrip plunged over 14 percent intraday on Monday hitting new 52-week low in the process. This comes after the resignation of Non-executive and Non-independent Director, Nasim Zaidi. The airline halted all domestic and international operations indefinitely from April 17 after the consortium of lenders led by State Bank of India refused to provide the much-needed emergency funding of Rs 400 crore.
The company has a debt of over Rs 8,000 crore. With most of its fleet grounded by lessors on account of unpaid dues, the company has been struggling to stay afloat for nearly a year now. On April 17, it finally gave in to the financial stress and halted all operations.
Lenders hope for the success of Jet’s stake sale process that has attracted four eligible bidders —TPG Capital, Indigo Partners, Etihad Airways and the National Investment and Infrastructure Fund (NIIF). Shortlisted bidders will have to offer bids by May 10.
An employee union of Jet Airways has said they will neither let the airline go down nor tolerate casual talk to dismantle it "piece by piece". All India Jet Airways Technicians Association (AIJATA), which has around 800 members, has written an open letter.
The letter has come against the backdrop of Minister of State for Civil Aviation Jayant Sinha's reported comments that capable employees of Jet Airways would be absorbed by other airlines.
"The stock having fallen sharply on Thursday may now consolidate with a bearish tilt for some time till some large positive development is announced. Finalising the buyer/bidder in a tight period may not be easy. Only if a strategic partner having experience of running this business expresses serious interest in owning a majority stake, the stock price could react positively," said Deepak Jasani, Head of Retail Research at HDFC Securities to moneycontrol.com.
"In case no bidders are finalised in the next few weeks, then the stock price could keep falling as more investors start to lose patience. Retail investors may have to take their call about the possibility of a strategic investor coming in and in case they think that is unlikely, then they could cash out," he added.
SBI, the lead lender of the seven-member consortium of domestic banks that have extended loans to the airline, has started the bidding process for stake sale in the carrier and clarity about potential bidders would emerge next month.
At 09:54 hrs Jet Airways was quoting at Rs 141.50, down Rs 22.40, or 13.67 percent. It has touched a 52-week low of Rs 132.20.
