In a dramatic change in its stance, Etihad Airways is again back in the thick of things around Jet Airways, the distressed airline for which lenders have called for expression of interest from bidders.
Sources told Moneycontrol that senior advisors from the Abu Dhabi-based airline met officials from the State Bank of India, the lead lender, on April 4. These include Cramer Ball, an Etihad veteran and former Jet CEO, and Rangesh Embar, a senior finance official from the airline.
While the agenda is not known, officials from the industry said that the meeting is a sign of Etihad's renewed interest, and that it is expected to submit its EoI for Jet. It currently holds 24 percent in the Indian airline.
In a statement after a meeting between SBI Chairman Rajnish Kumar and senior officials of Civil Aviation ministry, lenders said they will invite EoI on April 6 and set a deadline of April 9.
"The lenders intend to pursue the Bank-Led Resolution Plan for sale of stake in the company in a time-bound manner under the present legal and regulatory framework and intend to invite expressions of interest," said the statement.
Important for Etihad
Since its investment into Jet Airways in 2013, when Etihad took a 24 percent stake for Rs 2,060 crore, the Abu Dhabi had made the most of its shareholding.
Jet Airways flights from India to Abu Dhabi, fed Etihad's services to Europe and beyond. But since the present crisis began, Jet Airways curtailed its operations as its aircraft got grounded after defaults on payments to lessors. Many of its flights to Abu Dhabi, Etihad's hub, were also cancelled, and by March, Jet Airways suspended its service to the UAE emirate.
"For Etihad, Jet is like a lifeline. It needs Jet to feed its flights," said a senior executive from the industry.
But it almost looked like Etihad would exit Jet Airways, as one of its conditions to invest further was the ouster of Naresh Goyal. Though the Jet Airways founder initially resisted, the increasingly precarious condition of the airline, later forced him to step down.
Earlier this week, Goyal said he had has agreed to sacrifice "every control and interest" in the distressed airline and signed on the "dotted lines" to ensure the lenders transfer emergency funds to the company.
With Goyal ceding control, Etihad is again back to the negotiating table.
While Tata Sons may be among others who could also submit EoIs for Jet Airways, Etihad will continue to play a crucial role in the rescue plan.
The airline had been in the look out for a local partner, given the FDI cap of 49 percent. This is where National Investment and Infrastructure Fund could play a crucial role, especially given that it has an investor in Abu Dhabi Investment Authority. The sovereign wealth fund is owned by the Emirate of Abu Dhabi. Etihad is owned by the government of Abu Dhabi.
The government link is important, given the close ties that New Delhi has with Abu Dhabi. Earlier this week, Prime Minister Narendra Modi was conferred with UAE's highest civilian award, by Abu Dhabi Crown Prince, Sheikh Mohamed bin Zayed Al Nahyan.