Jet Airways: Etihad in talks with airline, bankers
Jet Airways Ltd and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters on Wednesday.
Jet Airways Ltd and second-largest shareholder Etihad Airways have been holding rescue talks with bankers of the indebted Indian carrier, three people aware of the matter told Reuters on Wednesday.
Executives of the airlines met State Bank of India officials in recent days to discuss Jet’s cash flow and business plan, two of the people said. One said Jet has outstanding dues of about $400 million, mainly owed to lessors and vendors.
Abu Dhabi-based Etihad is also considering raising its stake above the 24 percent it has held since 2013, said one of the people, who declined to be identified as the talks were private. Foreigners can own up to 49 percent of an Indian carrier.
The news sent Jet’s stock up as much as 3 percent in early trade before closing down 5.5 percent.
Etihad declined to comment. Jet and State Bank of India did not respond to requests for comment.
Jet, controlled by founder Naresh Goyal, is India’s biggest full-service carrier by market share, serving one of the world’s fastest-growing domestic aviation markets.
Yet the market is dominated by low-cost carriers such as Interglobe Aviation Ltd’s IndiGo and is blighted by high fuel prices, a weak rupee and price competition.
More cash from Etihad is not guaranteed considering its own financial state, one of the people said. The airline reported a $1.52 billion annual loss for 2017 due in part to insolvency partnerships Alitalia and Air Berlin PLC.
However, there is also the fear that Jet will struggle to survive without further investment, the person said.
Etihad’s board meets on Friday and could discuss the airline’s Jet investment, one of the people said.
“Should the board decide something, it has to go to the executive council of Abu Dhabi for approval and that would take some time,” the person said.
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