Jet Airways lenders, Etihad approach Hindujas for stake sale

THE Hinduja Group has begun showing interest in investing in India’s grounded airline, Jet Airways after lenders to the company and its second major shareholder, Etihad Airways approached the group.

However, the group has so far not given a clear commitment about investing in the Naresh Goyal founded airline, ‘The Economic Times’ reported citing the people close to the development.

When the officials from Etihad approached GP Hinduja offering a stake in the airline, the elder brother, in turn, put the officials in touch with Ashok Hinduja who heads the group’s business in India.

“The Hinduja Group is non-committal (on Jet), but will keep its options open,” the daily quoted a senior executive as saying.

He added that the group officials will meet Etihad and the airline’s lenders in the very near future.

The executive noted that the exploratory talks are on, however, clarified that no official meeting has taken place yet.

Jet Airways is currently 51 per cent owned by Naresh Goyal. Etihad owns 24 per cent, and the rest is with the public.

Etihad Airways last week made a conditional bid to invest in the airline. It said it would not be able to invest more than Rs 17 billion, a fraction of what Jet Airways requires to resume its operations.

Lenders, led by the State Bank of India (SBI), now have to search for a new majority investor for the airline.

Jet Airways struggled to compete with low-cost carriers like IndiGo and SpiceJet that now dominate Indian skies and the debt-laden carrier was forced to ground its entire fleet last month, resulting in the loss of more than 20,000 jobs.

Jet has debts of over $1 billion and been in a tailspin for months. It defaulted on loans and failed to pay much staff since the start of the year.

After its lenders declined to extend more funds, the carrier was forced to ground its entire fleet on April 17, triggering protests by thousands of employees who have been not paid salaries.