HYDERABAD: After days of quiet, shares of Jet Airways Ltd rallied on BSE Wednesday amid reports that the airline’s embattled promoter Naresh Goyal was back to the bidding process, along with five entrepreneurs including UK-based Jason Unsworth.
The move comes just two days ahead of the May 10 deadline for submitting financial bids. In a disclosure to bourses, Jet said it wasn’t involved in the bidding process, implying that Goyal’s bid, if any, was in his individual capacity.
Goyal may have decided on a reckless last throw, but it’s unclear if the regulators will take to it kindly.
As an analyst noted, it amounts to giving him a backdoor entry and such an option wouldn’t exist had Jet gone into the NCLT process.
“Take Essar Steel, where promoters aren’t allowed to re-enter despite offering upfront cash,” he said.
Lenders Express reached out to remained zip-lipped about both binding and financial bids, while analysts tracking the company steered cleared of commentary.
The deadline for binding bids ended on April 30.
Though Jet’s operations were suspended last month, a death knell hasn’t been rung, which is precisely what’s keeping market hopes up about a turnaround.
Jet’s scrip has been on a slow puncture since April 18, when operations were temporarily shut down; it touched a 52-week low of Rs 121.30 on Tuesday. However, it closed 3.22 per cent higher at Rs 131.45 Wednesday.
It will also be interesting to see if lenders, besides restructuring debt, will provide fresh funding. One of the bankers told Express that at least two scenarios were being considered, but both will need equity and working capital.
Meanwhile, last month, Jet’s lenders who sounded reasonably hopeful of a successful bidding, are marking down their exposure to Jet as an NPA, with some even making over 50 per cent provisions. Edelweiss Securities pegged the write-offs at Rs 2,800 crore via debt-equity conversion, but in the absence of RBI’s controversial February 12 circular, it’s unclear if lenders can exercise that right.
In case there are no viable bids, the consortium will file for bankruptcy to begin the liquidation process, meaning the debt-equity conversion proposal lapses while write-offs will further shoot up, adding stress to banks’ balance sheets.