SBI starts Jet Airways' stake sale, looks for 'change in control and management'

The State Bank of India Monday invited bids for stake sale in ailing Jet Airways. The SBI, which is the lead lender of a consortium of domestic lenders that has extended loans to Jet Airways, is looking for "change in control and management" of the carrier, according to a public notice. SBI Capital Markets would be assisting and advising the lenders on the bid process.

The bids have to be submitted by April 10. The lenders' consortium has taken control of the airline under a debt recast plan.

Under the debt resolution plan approved by the Jet Airways' board on March 25, lenders have taken a majority stake in the airline and are set to infuse Rs 1,500 crore. Besides, the carrier's founder and promoter Naresh Goyal as well as his wife Anita Goyal quit the board. The shareholding of Goyals has come down to 25 per cent from 51 per cent earlier.

Acute financial crunch has forced the airline to ground aircraft, cancel flights and delay payment of salaries, including to pilots. Last week, the lenders said they would pursue resolution plan for the carrier in a time-bound manner under the present legal and regulatory framework.

"The lenders are cognisant that the outcome of efforts of the lenders will depend on the interest shown by the parties on sale of stake in the company," the statement issued by lenders had said.

Earlier, the Indian Oil Corporation Ltd (IOCL) had stopped fuel supply to Jet Airways across India due to non-payment of outstanding bills, said the spokesperson on Friday last week. Later, after Centre’s intervention, the fuel supply were resumed. Jet Airways, in which SBI-led consortium of lenders is set to take management control under a debt-recast plan, has drastically curtailed operations with a fleet of 26 planes. On March 25, Jet Airways board had approved a resolution plan formulated by SBI-led domestic lenders, under which had agreed to infuse an emergency funding of Rs 1,500crore into the airline, and convert the same into equity worth 50.1 percent for a notional value of just Re 1 each share. The airline, however, has not yet received the much-needed funds.