Jet Airways dips 5% amid reports Hinduja Group backs out, EoI deadline ends

Jet Airways
Shares of Jet Airways (India) were locked in the lower circuit band of 5 per cent at Rs 47.75 on the BSE on Thursday amid reports that the Hinduja Group, that had explored investing in the beleaguered airline, has backed out as it found no value in the company. A Dubai-based fund, too, had evinced interest in investing in the grounded airline, but did not submit an offer.

However, according to the  report, South America-based Synergy Group and Delhi-based Prudent ARC submitted the EoIs yesterday -- the last day to submit the proposal for the revival of the airline.

"Synergy Group, one of the suitors, has said slots at London’s Heathrow airport are critical to the airline’s operations and will decide on participating in the resolution only if it gets clarity. The group has also set other riders to revive the airline. It wants to form a new company with its assets, employees, and operating permit but minus all liabilities," said the report. READ HERE

For now, Synergy Group has not found an Indian partner who will take majority control of the airline. As per the FDI rules for the aviation industry, Central government has capped investment by any foreign player at 49 per cent.

The beleaguered airline had shut its operations in April last year due to severe cash crunch. It was admitted under the insolvency process in June, 2019. Creditor claims on the airline are of Rs 36,090 crore, of which Rs 14,640 crore was admitted as on October 20. EoIs have been invited twice and the bid submission deadline extended, but there is no resolution plan from suitors as yet. 

Shares of Jet Airways had hit a 6-month high yesterday, having been locked in the 5 per cent upper circuit for the 12th straight day at Rs 50.25 on the BSE. During the past 12 trading days, culminating on Wednesday, the stock rallied 78 per cent from the level of Rs 28.20, hit on December 30, 2019. In comparison, the S&P BSE Sensex was up 1 per cent during the same period. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel