India's Jet Airways in creditor talks over possible
Etihad bailout
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[January 16, 2019]
By Aditi Shah
MUMBAI (Reuters) - India's Jet Airways <JET.NS>
said on Wednesday it is in talks with its lenders to resolve its debt
problems, amid increasing prospects of a bailout by major shareholder
Etihad Airways.
Shares in Jet, which has been hit by intense competition, a depreciating
rupee and high oil prices and said it was now looking at a cash
injection by stakeholders and board changes, closed more than 8 percent
lower.
Representatives of the two airlines were due to meet with creditors, led
by Jet's biggest lender State Bank of India <SBI.NS>, in Mumbai to
discuss a proposal that involves Etihad increasing its stake, a source
familiar with the situation said.
However, India's civil aviation secretary, R N Choubey, told reporters
on the sidelines of a conference in Mumbai that control of Jet would
need to remain in domestic hands.
![](http://archives.lincolndailynews.com/2019/Jan/16/images/ads/current/lincolntheatre_sda_031016.png)
"Under no circumstances will we allow the substantial ownership and
effective control to be busted," he said, adding that even if Etihad's
stake is raised to 49 percent, the regulator will need to be satisfied
that control was local.
CNBC-TV 18 reported that Etihad had offered to buy Jet shares at a 49
percent discount and immediately release $35 million to bail out the
troubled carrier, citing a letter to SBI from the Abu Dhabi airline's
CEO Tony Douglas.
Jet will not be able to fund its operations beyond the next week, the
CNBC-TV 18 report cited Douglas as saying.
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![](../images/011619pics/busine27.jpg)
A Jet Airways plane is parked as another moves to runway at the
Chhatrapati Shivaji International airport in Mumbai, India, February
14, 2018. REUTERS/Danish Siddiqui/File Photo
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Etihad wants Jet's founder and Chairman, 69-year-old Naresh Goyal, to step down
from the board and his stake to be slashed to 22 percent from 51 percent,
CNBC-TV 18 reported.
Under Indian capital markets rules, Etihad would be required to make an open
offer to shareholders for a majority of the shares once its stake goes past 25
percent, something the Abu Dhabi airline is seeking an exemption from, CNBC-TV
18 said.
Choubey said that the ministry had not received a request from Jet and Etihad
for such an exemption.
Jet's chief executive, Vinay Dube, declined to take comment at the aviation
conference in Mumbai, while an Etihad spokesman also declined to comment.
A source close to Jet said it will not take delivery of any more Boeing <BA.N>
737 MAX planes until a resolution plan is agreed.
(Reporting by Aditi Shah in Mumbai, additional reporting by Tanvi Mehta and
Arnab Paul in Bengaluru and Alexander Cornwell in Dubai, Writing by Jamie Freed;
Editing by Himani Sarkar and Alexander Smith)
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