State Bank of India has started reaching out to unsolicited bidders of Jet Airways in an effort to bring equity into the airline after it emerged that Etihad Airways is only interested in a minority stake.
The bank, which is the lead lender to the airline, has already met top officials at AdiGro Aviation, the arm of London-based AdiGroup. Reports added that the lender will meet the Mumbai-based Darwin Group, on May 15.
Etihad Airways, which was the only shortlisted bidder to put in a proposal on May 10, has committed to invest Rs 1,700 crore in return for a minority stake in Jet Airways. At present, it has a 24 percent stake in the Indian carrier.
“AdiGro has completed its meeting with SBI Caps. It is quite advanced in the process,” said a senior executive from the industry. SBI Caps is overseeing the bidding process.
AdiGro Aviation founder Sanjay Viswanathan had earlier told Moneycontrol that he has the backing of investors and is keen to partner Etihad Airways in turning around Jet Airways.
A Russian interest
Apart from these unsolicited bidders, SBI Caps and SBI have received interest, this time from a Russian aviation professional Oleg Evdokimov.
Though not a bidder, Oleg has offered his expertise to turnaround the airline. “I don’t want shares,” he said.
The Moscow-based senior executive of VIP Class, which provides clients with first-class air travel, has claimed to have the backing of aviation professionals.
“I also have been promised help by two airlines, one from Asia and another from Africa, in plans to turnaround Jet Airways,” said Oleg.
He has written to SBI, offering ways to turnaround the airline. “The money that has been promised by Etihad Airways is enough. There are other ways to raise funds, including selling owned aircraft and stake in Jet Privileges, the loyalty program,” said Oleg.
He said Jet Airways’ debt of Rs 8,000 crore can be structured.
With its top leadership taking the exit door, Jet Airways has started seeing an exodus of employees, including pilots, from Tuesday onward.
Sources told Moneycontrol that on Tuesday alone about 100 first officer pilots put in their papers. “On May 1, there were 1,019 pilots on the roll, now it must be around 700-800,” said a senior executive from the industry. The company originally had about 1,800 pilots.
The resignations have come from all over the country. “Ninety percent of pilots I know of, have put in their papers now. The rest are also contemplating,” said one Jet Airways pilot who put in his papers on Tuesday.
Executives from the industry added that similar resignations have come in from crew and ground staff. This will reduce the overall headcount at Jet Airways, which had 12,000 employees at the beginning of the month, down from about 16,000 earlier. It employs another 6,000 on contract.
On Tuesday, Jet Airways top leadership, including CEO Vinay Dube, his deputy and CFO Amit Agarwal and HR head Rahul Tanjea, put in their papers.
The exits took place a day after banks, led by State Bank of India, opened the bid submitted be Etihad Airways, which has committed Rs 1,700 crore in funding.
But that is not enough to meet Jet Airways obligations, which include Rs 8,000 crore of debts, and thousands of crores more in arrears to lessors, vendors and employees.
Separately, the company has also started firing its employees in overseas offices. A source close to Jet Airways confirmed a Hindu BusinessLine report that about 50 employees in its international offices have been asked to leave.