A group of Jet Airways employees, who had earlier offered to take over the distressed airline, met SBI Caps officials on May 2 to discuss the proposal. SBI Caps is overseeing the bidding process of Jet Airways.
While the two sides agreed that the situation at the airline ‘is extremely precarious’, officials at SBI Caps told employees that their proposal will be considered only after conclusion of the bidding process. “The SBI Caps team stated that lenders may review the status and consider any other options and proposals, including ours, after conclusion of bidding, and if the said process does not provide a satisfactory solution,” a senior Jet Airways’ executive told Moneycontrol.
Representatives of the Society of Welfare for Indian Pilots and Jet Aircraft Maintenance Engineers Welfare Association were part of the meeting, which occurred even as speculation has increased over the shortlisted bidders not interested in taking over the airline anymore..
On April 29, Jet Airways’ employees had written to State Bank of India Chairman Rajnish Kumar, offering to take over the airline. They promised an investment of Rs 7,000 crore, which includes Rs 3,000 crore from investors and Rs 4,000 crore from employees through hypothetical five-year employee stock option programme.
In the short term, Jet Airways’ employees have proposed to use investor funds to clear arrears, including those to employees, lessors and banks. Though they haven’t identified the investors, employees claim they have received funding commitments.
Jet Airways’ employees have suggested utilising funds from the employee stock ownership plan (ESOP), which they expect to receive in future, to meet the airline’s medium and longer term liquidity issues.
SBI Caps had last month shortlisted four bidders: Etihad Airways, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF). The bidders have to submit their bids by May 10.
At the meeting with Jet Airways’ employees, officials from SBI Caps detailed the bidding process. “In the meeting all issues, which needed to be addressed through an equity infusion solution, were discussed. The financial situation of the company in terms of outstanding liabilities is extremely precarious,” the executive quoted above said.
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