Jet has accumulated debt of nearly Rs 8,500 crore on its books with total liabilities of around Rs 25,000 crore.
Under foreign direct investment regulations, a foreign airline can hold a maximum stake of 49% in an Indian airline, with majority control resting with an Indian partner.
Several Levels of Due Diligence
Jet is running out of time as its pilots are being hired by rivals in India and abroad.
Jet is currently 51% owned by Naresh Goyal. Etihad owns 24% and the rest is with the public.
Both the airlines stopped international operations and went all-domestic before suspending operations, though in Jet’s case that happened for less than a week, while Kingfisher flew within the country for some months.
Jet needs an urgent cash infusion to survive. Its CEO Vinay Dube appealed to banks during the weekend for additional loans of Rs 1,000 crore.
According to the conditions in the bidding document, an investor needs to have a net worth of Rs 1,000 crore and allotted funds of Rs 1,000 crore more to invest in Jet.
Jet Airways’ Employees, Ground Staff Gather At Headquarters To Enquire On Unpaid Salary, Job Security
The members have been asked to gather at 1:30 p.m by the All India Jet Airways Officers & Staff Association
Lenders have initiated the bidding process as Jet was unable to honour its debt obligations.
The pledging of Goyal’s remaining shares are critical to the plan by the banks to sell a controlling stake in the airline to a new investor.