Sale of India’s Jet Airways under threat as two potential investors walk away

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The sale of India’s Jet Airways has been thrown into doubt after two potential investors have backed away. Anil Agarwal, the head of Vedanta and whose family trust, Volcan, had investigated taking a stake in the failed airline has confirmed that there is no longer any interest from their side. Etihad, the Gulf carrier which has held a 24% stake in Jet Airways since 2013, has also confirmed that it has no intentions of investing further owing to the Indian carrier’s liabilities, stating that: “Etihad remained engaged in the process, but despite the endeavors of everyone involved there remained very significant issues relating to Jet’s previous liabilities.”

Expressions of interest (EOIs) in Jet Airways have to be submitted by August 13, and while there had been three EOIs submitted, that number is likely to be reduced to two with the withdrawal of Volcan. The only criterion that has been set for submission of an EOI is that any bidder must have a minimum net worth of 10 billion Indian rupees (US$140 million). With the current situation little different to that where Jet Airway’s lenders had previously requested submissions of EOIs and had failed to attract any firm bidders, the carrier is now stuck in what appears to be a state of limbo, which can only decrease any value left. The carrier ceased all operations in April this year after racking up over US$1 billion in debt, with over 90% of its planes grounded either through maintenance difficulties or aircraft being seized by lessors for lack of lease payments.

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