Jet’s lenders extend deadline after poor show in first round

Jet’s lenders extend deadline after poor show in first round

Mumbai, Apr 11: Lenders to Jet Airways have agreed to sweeten the terms for sale of the troubled airline and have extended until April 12 the last date for potential bidders to submit their expressions of interest (EoIs). Those who qualify must submit their binding bids by April 30. Lenders have also allowed proposed applicants to submit their bids through email and subsequently forward the hard copies of the required documents by April 14.
The earlier deadline for submitting an EoI ended on Wednesday. SBI caps said, ‘We are in receipt of some EoIs and some more persons have expressed desire to participate if additional time is provided. Accordingly, in order to allow better participation in the process, the domestic lenders have agreed for extension timeline.” Lenders have already been having talks with Etihad and National Investment and Infrastructure Fund (NIIF).
According to bankers, the Supreme Court decision to strike down the Reserve Bank of India’s (RBI’s) February 12 circular meant that lenders could not acquire control by converting one rupee of debt into 50% equity. While banks were willing to convert their debt at a higher price and sacrifice some of their dues, they were still awaiting RBI’s clarification.
Earlier, SBI chairman Rajnish Kumar had said that lenders did not want to initiate insolvency proceedings against Jet Airways. Lenders are now saying that all options are open. Government bidders can participate without having to qualify through the EoI appraisal round. Also, sovereign wealth funds need not meet the eligibility criteria.
In a corrigendum to its original offer document, lenders said that bidders can either acquire the company or restructure existing facilities and infuse funds by way of loans or acquire stake up to 75% by either subscribing to new issue of equity shares or buy them from existing investors.
The bid document said that it was seeking interest from bidders to acquire ownership of the company, effect change in control and management and for settlement of its obligations. Shares of Jet Airways were down 1.6% at Rs 263 by close of Wednesday’s trade on the BSE. At current share price, the airline has a market cap of just under Rs 3,000 crore.
Earlier, the EoI document said that ownership shall mean when a person acquires at least 3.54 crore equity shares of the company, comprising 31.2% of equity, and up to a maximum of 8.54 crore shares of the company, comprising 75% equity share capital with control of the company. Industry experts say that Jet’s valuation would have dropped in recent weeks given that lessors have deregistered some of the grounded planes and the Director General of Civil Aviation has handed over some of the landing slots to rivals after the airline cancelled a large number of flights.