Finance Update

PE grouping circles Jet Airways, banks tap global airlines

MUMBAI | NEW DELHI: Private equity players

TPG

,

Indigo Partners

and the government-anchored National Investment and Infrastructure Fund (NIIF) are teaming up to submit an expression of interest (EoI) for

Jet Airways

, said multiple sources, even as lenders explore an alternative by way of an operational turnaround if the bidding evokes lukewarm response.

The distressed airline’s lenders have also approached Delta Air Lines and Air France-KLM to gauge their interest. One of the sources said teams from the two foreign airline companies are in India, though it could not be independently verified if they will submit a bid. Sources in the civil aviation ministry said they were unaware of the global airlines being approached.

State Bank of India, the lead lender to the airline, had also approached PE funds such as Blackstone to evaluate if they would be interested if Jet’s loyalty programme were to be monetised. But sources said that would be possible only after the airline itself is stabilised.

The SBI-led consortium of lenders on Thursday asked interested parties to submit EoIs between April 6 and April 9, advancing and shortening the time frame that had earlier been announced.

“The TPG-led consortium will evaluate the EoI conditions once they are made public over the weekend,” said an official in the know. “TPG and Indigo Partners have been in the mix before, and were engaged with SBI. They needed an Indian partner, and NIIF was the obvious vehicle,” he added.

The brass of Etihad Airways led by Cramer Ball, an aviation industry veteran and former CEO of Jet, and Rangesh Embar met SBI officials on Thursday. The meeting set off renewed speculation that the Abu Dhabi-based carrier, which holds 12% in the troubled Indian carrier, may also throw in its hat. However, Etihad has sought an exemption from making an open offer to Jet shareholders, which the stock market regulator has not yet agreed to.

Sources said the Tatas and the Adani Group, which had been approached to bail out Jet, are unlikely to participate at this juncture. The Adanis did spend time with the airline’s management as recently as January before deciding to bid aggressively for aviation-related infrastructure such as airports.

TPG declined to comment while Delta said it would not comment on “speculation”. Mails sent to NIIF, Indigo Partners and Air France-KLM did not elicit a response till press time on Friday.

Source

Prakash Poojary
Business Analyst

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