Etihad, Jet Airways in talks on rescue deal — sources

A Jet Airways plane is parked as another moves to the runway at the Chhatrapati Shivaji International airport in Mumbai, India, February 14, 2018. (REUTERS)
Updated 05 December 2018
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Etihad, Jet Airways in talks on rescue deal — sources

  • India is one of the world’s fastest-growing domestic aviation markets but high fuel prices, a weak rupee and intense price wars in the country

NEW DELHI: Etihad Airways is holding talks with Jet Airways Ltd. and its bankers on a rescue plan for the debt-laden Indian carrier, two sources aware of the matter told Reuters.
Executives from Etihad and Jet have met some of the airline’s bankers in Mumbai in recent days to discuss ways to address its cash flow issues and evaluate the carrier’s future business plan, the sources said.
Etihad, which owns 24 percent stake in Jet Airways, is also considering investing fresh funds in the airline if it can agree on the structure, one of the sources said, adding that no deal has been finalized.
The sources did not want to be named as the discussions are private.
Jet, which is India’s biggest full service carrier by market share, is in desperate need of cash. The 25-year-old airline, founded by Naresh Goyal, owes money to lessors and vendors, has delayed salary payments to pilots and senior executives and is cutting flights on non-profitable routes to save money.
India is one of the world’s fastest-growing domestic aviation markets but high fuel prices, a weak rupee and intense price wars in the country, which is dominated by no-frills airlines like Interglobe Aviation Ltd’s IndiGo, has exacerbated Jet’s woes in recent months.
Etihad has already come to Jet’s rescue once when it picked up a 24 percent stake in the carrier in 2013 but the situation is different this time.
While the Abu Dhabi-based carrier is invested in Jet, it has lost money in other airline ventures such as Alitalia and Air Berlin and may be wary of loosening the purse strings again, said another source.
Also, with tighter lending norms and a liquidity crisis in India, bankers may be hesitant to lend more to the struggling airline.
On Tuesday news channel CNBC-TV18 reported citing sources that Jet is close to finalizing a deal under which Etihad will inject fresh funds in the airline.
Goyal, who is founder and majority shareholder, has assured the airline’s pilot union that the funding, which will likely result in route restructuring and more flights to Abu Dhabi, could take place as early as mid-December, the channel said.
Goyal has also assured pilots that there will be no delays in salary payments from April 1, according to the channel.
Jet and Etihad did not immediately responded to Reuters’ emails seeking comment.


Gulf stocks extend losses on tanker attacks

Updated 17 June 2019
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Gulf stocks extend losses on tanker attacks

  • Cautious mood among investors as fears of military confrontation rise

DUBAI: Stock markets in the Gulf extended losses on Sunday reflecting a cautious mood among investors following last week’s oil tanker attacks. 

The attacks on the tankers in the Gulf of Oman on Thursday raised fears of a military confrontation in a vital shipping route for global oil supply and heightened tensions between Iran and the US, which have been in a standoff over Iran’s nuclear program. 

The Saudi index had dropped 1.6 percent on Thursday and fell a further 0.6 percent on Sunday after slight gains in early trade. Most Saudi banks were down, despite Sunday’s announcement by Saudi British Bank that its merger with Alawwal Bank was completed. 

HIGHLIGHTS

• Gulf stocks reverse early gains.

• Gulf of Oman tanker attacks dampen investor mood.

• Saudi banks mostly down despite SABB-Alawwal merger.

The two banks have combined to create the country’s third largest lender, becoming a single listed company after regulatory approvals. SABB’s shares shed 0.1 percent. Alinma Bank, however, gained 0.4 percent, and was one of the stocks registering the highest trading volume on Sunday. 

In the UAE, the Dubai and Abu Dhabi indexes fell 0.7 percent and 0.2 percent, respectively. The Dubai market had risen earlier in the day, boosted by DAMAC Properties and Union Properties, which closed up 2.2 percent and 0.5 percent, respectively. But heavyweight Emaar Properties, the largest developer in the emirate, fell 2.5 percent, weighing on the index. 

Dubai’s telecom operator Du (Emirates Integrated Telecommunications Co) shed 0.4 percent, reversing earlier gains, after it said the UAE sovereign wealth fund Emirates Investment Authority had increased its stake by buying 463.3 million shares from Mamoura Diversified Global Holding and General Investments. 

In Abu Dhabi, blue chip companies Aldar Properties, First Abu Dhabi Bank and Abu Dhabi National Oil Company for Distribution, led losses, dragging down the main index. The other Gulf markets were all in the red, except for the Bahrain index, which rose slightly. 

In Egypt, the index gained 0.2 percent, boosted by a 4.5 percent gain by Pioneers Holding Company for Financial Investments. The company said one of its divisions, Arab Dairy Products, had received a letter of intent from a Netherlands based company about a plan to buy it.