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Jet Airways lenders 'reasonably hopeful' of successful bids for grounded airline

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Lenders to India's Jet Airways Ltd said on Thursday they are "reasonably hopeful" that the bidding process for the grounded airline will end successfully.

[MUMBAI] Lenders to India's Jet Airways Ltd said on Thursday they are "reasonably hopeful" that the bidding process for the grounded airline will end successfully.

Jet Airways, once India's largest private airline, on Wednesday evening halted all flight operations indefinitely after lenders led by State Bank of India declined to extend more funds to keep it going.

The carrier, saddled with roughly US$1.2 billion of bank debt, has been teetering for weeks after failing to receive a stop-gap loan of about US$217 million from its lenders, as part of a rescue deal agreed in late March.

At its peak, Jet operated over 120 planes and well over 600 daily flights. The airline, which has roughly 16,000 employees, has in recent weeks been forced to cancel hundreds of flights and to halt all flights out of India as funds dried up.

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"The lenders after due deliberations decided that the best way forward for the survival of Jet Airways is to get the binding bids from potential investors who have expressed EOI and have been issued bid documents on April 16," the lenders said on Thursday, referring to expressions of interest.

"Lenders are reasonably hopeful that the bid process is likely to be successful in determining fair value of the enterprise in a transparent manner."

CNBC-TV18 reported on Tuesday that Jet's lenders were set to invite binding bids from four shortlisted suitors that include private equity firms TPG Capital and Indigo Partners, Indian wealth fund National Investment and Infrastructure Fund (NIIF), and Etihad Airways, which already owns a minority stake in Jet.

Shares in Jet, which have tumbled about 60 per cent in the last year, closed on Tuesday at 240.50 rupees a share. Indian markets were closed on Wednesday due to a public holiday.

Jet still has a market capitalisation of about US$400 million, as investors have clung to hopes of a rescue deal being clinched.

REUTERS