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Jet Airways Shares Slump 6% After Reports Say Hinduja, Etihad Fail to Strike Deal

News18 creative by Mir Suhail

News18 creative by Mir Suhail

A meeting of the representatives from the Hinduja Group and Etihad Airways took place on 23 May in Abu Dhabi to work on the structure of the deal.

Jet Airways shares slumped over 9% in intraday trade on Friday as media reports suggested that negotiations between the Hinduja Group and Etihad Airways regarding the joint ownership of the grounded airline have hit a dead end.

A meeting of the representatives from the Hinduja Group and Etihad Airways took place on 23 May in Abu Dhabi to work on the structure of the deal. State Bank of India (SBI) officials were also present. However, no concrete decision was taken, according to reports. “No decision has been taken regarding the partnership. The Hinduja Group is uncertain about making any investment in Jet Airways. Initial talks are still underway. It is unlikely that they will translate into an investment,” a report said.

A meeting between executives from Jet Airways and Etihad may take place next week.

The BSE has also sought clarification from Jet Airways with reference to the news.

Last week, SBI chairman Rajnish Kumar had reportedly said that clarity over future of Jet will emerge in a week’s time.

“Various options are being evaluated. Legal opinion is being taken. There are many investors who are showing interest. We have to see whether they have the money and the wherewithal. I think the clarity should emerge in a week’s time,” the SBI chief was quoted as saying.

Jet Airways had suspended its operations on 17 April due to liquidity crunch. The airline owes banks nearly Rs 8,400 crore, and is yet to clear dues to its lessors, vendors and employees. About three-fourth of its fleet has been de-registered and taken away, airports slots have been distributed to peers and much of its human resource has left to join competition.

A consortium of lenders to Jet Airways, led by SBI, invited bids for 76% stake in the cash-strapped airline. Etihad Airways was the only shortlisted bidder to put in a proposal for Jet Airways. But the Abu Dhabi-based airline wanted just a minority stake in Jet Airways and committed only about Rs 1,700 crore. This forced the banks to look at other options.

The Jet Airways stock closed down 5% at Rs147.70 on Friday on BSE, while the benchmark Sensex rose 1.6%.