MUMBAI -- Abu Dhabi-based Etihad Airways has made a conditional offer to raise its investment in India's Jet Airways as the troubled airline faces a lawsuit over unpaid bills and an investigation into missing funds.
In a statement on Friday, the deadline for bids, adviser SBI Capital Markets announced that besides the sealed bid from Etihad Airways, it has received "a few unsolicited offers," which it will submit to the State Bank of India-led consortium of lenders weighing candidates for a proposed stake sale.
In a separate statement, however, an Etihad spokesperson said the sealed bid is conditional on finding joint investors.
"Etihad reemphasizes that it cannot be expected to be the sole investor, and that, amongst other requirements, additional suitable investors would need to provide the majority of Jet Airways' required recapitalization," the spokesperson said.
Jet Airways, once India's leading private-sector airline, has stopped flying amid a cash crunch. The lenders that have taken control of the airline issued a call for investors last month.
Etihad's cautiousness reflects its own struggles. The company has been posting losses for the past two years and has reportedly laid off some of its staff. Its strategy of taking minority stakes in struggling airlines has also been put to the test. Two European airlines Etihad had invested in -- Alitalia and Air Berlin -- have filed for bankruptcy protection.
Though SBI Capital Markets did not reveal the names behind the "unsolicited offers," media reports suggested that U.S. private equity companies TPG Capital and Indigo Partners, as well as the Indian government-run National Investment and Infrastructure Fund had expressed interest in buying stakes. London-based AdiGro Aviation also expressed interest in bidding for Jet Airways.
The cash-strapped airline halted all operations on April 18 after a group of lenders led by State Bank of India failed to agree to provide immediate working capital.
Saddled with debt of over $1.2 billion, Jet has partially defaulted on bank loans, aircraft leases, fuel bills and employee salaries since last summer. As aircraft lessors grounded airplanes, the airline reduced services, leading to a vicious cycle of declining revenue and further cutbacks in operation.
"(We have) made disproportionate efforts to keep Jet flying," State Bank of India Chairman Rajnish Kumar said.
On Friday, Hong Kong-based fuel supplier Sinopec Aviation sued Jet Airways over an unpaid $1.1 million bill.
Separately, the Economic Times newspaper reported that India's Registrar of Companies had inspected Jet Airways following allegations that money had been siphoned off from the airline. Jet Airways acknowledged that documents had been sought from the company in April in connection to the investigation.
The airline was operating only five planes before it decided to cancel all flights, down from 119 at its peak, according to data from the Ministry of Civil Aviation. Whether it will be able to resume commercial services will depend on the outcome of an ongoing bidding process that seeks investors willing to infuse fresh capital into the airline.
Lenders, including State Bank of India, currently own 51% of the airline, while Etihad Airways holds 12%. Founder Naresh Goyal controls 25%, under a recent restructuring plan that made way for Goyal's exit as chairman.
Jet Airways on Feb. 14 reported its fourth consecutive quarterly loss -- 5.88 billion rupees ($84 million) for the October-December period.