The Hinduja Group on Tuesday said it was considering the opportunity to invest in Jet Airways, leading to nearly 15 per cent increase in the airline’s stock price.
“Hinduja Group is evaluating the Jet Airways opportunity,” the group said in response to a query from The Indian Express on whether it is planning to put in a bid for the airline. Lenders to the airline had invited binding bids from investors wanting to pick up stake in Jet Airways by May 10.
Sources said Hinduja Group is evaluating investment in partnership UAE-headquartered Etihad Airways, which is already a major shareholder in Jet Airways. “Etihad had reached out to the Hinduja Group to join the bid as an Indian partner. The Hinduja Group is currently evaluating the proposal to pick up stake in Jet Airways. The due diligence is on and once it is completed they will take a call,” a source familiar with the discussions said. Hinduja Group has business interests in automobile, banking, oil and gas and real estate sectors among others.
Etihad, which currently owns 24 per cent of Jet Airways, has already submitted an Expression of Interest to the lenders for increasing stake in the airline. Given the current FDI norms, Etihad can increase its holding in Jet Airways under the automatic route to 49 per cent from 24 per cent now. Beyond this, it would require government approval. The FDI norms in civil aviation allow NRIs to acquire 100 per cent in airlines under the automatic route.
After flying high for almost 25 years, Jet had to temporarily suspend operations on April 17 when lenders, led by State Bank of India, refused Rs 983 crore in emergency interim funding. Jet Airways owed Rs 8,414 crore to lenders as on March 31, 2018. SBI Caps is currently overseeing the sale process on behalf of lenders. Apart from lenders’ dues, the airline owes money to operational creditors, aircraft lessors, staff salaries, and refund liability to passengers for ticket cancellations.
The airline’s scrip jumped 14.73 per cent to close at Rs 150.75 on the BSE. After opening at Rs 135 per share, it touched an intra-day high of Rs 154.80. Its shares have ended in the green for the second session in a row on the bourses. On the National Stock Exchange, the airline’s shares ended at Rs 148.40, gaining 12.94 per cent over the previous close. Its shares had touched an intra-day high of Rs 154.80 on the NSE.
After shutting down operations, Jet has been rapidly shedding aircraft in recent weeks, as lessors have repossessed planes due to unpaid lease rentals. The airline also saw departure of its top executives and board members. Robin Kamark, nominee director of Etihad Airways, resigned from the board of Jet Airways with effect from May 16. Last week, Jet Airways CEO Vinay Dube, Deputy CEO and chief financial officer Amit Agarwal and Kuldeep Sharma, company secretary and compliance officer, also quit the company.