InvestorQ : How is SBI going to recover its money from Jet Airways?
Aishwarya Nimbalkar made post

How is SBI going to recover its money from Jet Airways?

Answer
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Arusha Ray answered.
1 year ago


Jet Airways is going through a very bad phase as it is unable to pay off its debt, salaries, lesse, etc. This has led the consortium of lenders led by State Bank of India (SBI) to temporarily take the majority stake of the company. SBI has now proposed bid for the Jet Airways stake, wherein bid terms is to take for 75% of stake in the airline business. The bailout proposed is that the lenders will hold only 50% of the airline, its founder and former chairman Naresh Goyal will be holding 25.5% while airline’s second-largest shareholder-Etihad Airways' would take up to 12% stake.

The bidders are supposed to send their submission till 6 pm of 10 April 2019. KKR, Blackstone, TPG Capital are few bidders that seem interested to apply for the bid as per Bloomberg Quint news. Non-resident Indians Indian origin and foreign nationals are eligible for the bidding, for strategic investor category. For financial investors, the bids limit is set to Rs. 2,000 crore as the minimum asset under management. Bidding is also open to financial investors and sovereign wealth funds.


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Shreya Karn answered.
1 year ago


Before Jet Airway financial conditioned has worsened to the level of the non-operational stage, Jet Airways did had hope to avoid the crisis. In 2018, Tata had shown interest in Jet Airways. However, at that point of time founder, Naresh Goyal didn’t consider the Tata proposal as it was hoping that Etihad Airways might infuse capital. But after the Jet Airways financial condition worsened, State Bank of India-led consortium of lenders forced the Naresh Goyal to step down from airline’s board.

Later SBI wanted to sell a 75% stake of Jet Airways to the suitable party and so it started bidding. Tata did not show interest in bidding and quit the bidding process. As bidding result for Jet Airways is to be announced by 10 May, it is now rumored that Tata Sons might buy Jet Airways. Although this news is not confirmed by Tata spokesperson, 2 persons familiar with the topic said that Tata is willing to buy Jet Airways through bankruptcy. The person added that Acquiring Jet Airways through the bankruptcy process would insulate the acquirer from all of the above risk factors and this is the primary reason why there was no bid from the Tatas.”