Jet Airways slumps after reports of Etihad's non-binding offer

Shares of Jet Airways Ltd fell as much as 11.4 per cent on Monday after media reports said a buyout offer from West Asian carrier Etihad Airways was non-binding and might not guarantee a deal for the struggling Indian carrier.

Etihad, which owns about 24 per cent stake in Jet, submitted a bid for the airline, the unit of State Bank of India (SBI) overseeing the sale of the stricken carrier said on Friday.

That had raised hopes of a bailout for cash-strapped Jet, which has about $1.2 billion in bank debt.

According to a news report on Monday, Etihad wanted a commitment from banks on additional loans once it infuses equity into the company. The carrier had not been able to find a local partner and lenders may need to take about 80 per cent haircut on their outstanding loans to Jet Airways, the report said, citing banking sources. Shares of the carrier, which have tumbled almost 70 per cent over the past year, were down 5 per cent at Rs 144.3, as of 0445 GMT.

Jet, which owes vast sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from April 17 after its lenders refused to extend more funds to keep the carrier flying.

SBI also received two unsolicited, non-binding bids, the bank said on Friday. Jet and SBI were not immediately available for comments.