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Section of Jet staff seeks financial details to raise $700 mn
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SME Times News Bureau | 18 May, 2019
A section of grounded Jet Airways' employees comprising members of
airline unions have written to SBI Caps seeking asset and other
financial details of the crisis-hit company for raising $700 million (Rs
4,917 crore) from a mix of domestic and foreign investors.
SBI
Caps is the transaction advisor for the lenders of Jet Airways and
managing the stake sale process for the debt-laden carrier. The State
Bank of India (SBI) is the lead lender and currently in management
control of the airline.
"We would like to assure you that our
resources are at your disposal if they can be of any help. Also, as
understood by us during the meeting of 2nd May, we are actively working
with potential Indian and foreign investors to secure equity based
funding commitment of $700 million," Capt. P.P. Singh, Senior Vice
President at Jet Airways, wrote to SBI Caps.
Sensing that the
options to revive the grounded airline are fast running out, a group of
employees had on April 29 proposed to bid for management control of the
airline. They claimed to secure a funding of Rs 3,000 crore from outside
investors.
The employee group comprises members of Society for
Welfare of Indian Pilots (SWIP) and Jet Aircraft Maintenance Engineers
Welfare Association (JAMEWA). It is being led by Singh.
The
employee-investor consortium has asked SBI Caps to provide details about
the level of debt post haircut by banks and restructuring. Among key
financial details, Singh has asked as to how much stake investors will
get after infusing $700 million and the fund requirements for running
the airline for the next 24 months.
Facing a severe liquidity
crisis, Jet Airways had suspended its operations on April 17 and remains
grounded. The airline lenders are trying to rope in an investor to
resuscitate the airline and recover their money.
While lenders
are vetting various proposals, most of the top airline executives
including its CEO, CFO and the Company Secretary have resigned from
their respective positions citing personal reasons. Close on the heels
of resignation by airline's whole-time director Gaurang Shetty, Etihad
nominee on the board Robin Kamark resigned on May 16.
Abu
Dhabi-based Etihad Airways, which holds 24 per cent stake in crisis-hit
Jet Airways, is currently the only solicited bidder for a stake in the
airline. But experts have found its bid unattractive for the lenders,
given multiple riders attached to it.
Besides offering to invest
just Rs 1,700 crore against the requirement of Rs 15,000 crore to revive
the crisis-hit airline, Etihad, has in its proposal, put the onus of
finding a majority buyer on the lenders. The Gulf carrier also wants
exemption from giving an open offer in case its stake goes beyond 26 per
cent.
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