Etihad submits bid for India’s Jet Airways

Jet Airways aircrafts are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai last month. (Reuters)
Updated 10 May 2019
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Etihad submits bid for India’s Jet Airways

  • Etihad, which already holds a minority stake in Jet, is interested in re-investing in the airline
  • Jet is saddled with roughly $1.2 billion in bank debt

NEW DELHI: Etihad Airways has submitted a bid for a stake in India’s Jet Airways, the unit of State Bank of India (SBI) overseeing the sale of the stricken airline said on Friday.
SBI had invited binding bids for a stake in the airline, which is saddled with roughly $1.2 billion in bank debt. Binding offers were due by 6 p.m. local time on Friday.
Etihad, which already holds a minority stake in Jet, is interested in re-investing in the airline, subject to certain conditions, a spokesman for the Middle Eastern carrier said earlier on Friday.
However, he added that Etihad “cannot be expected to be the sole investor” and “additional suitable investors would need to provide the majority of Jet Airways’ required recapitalization.”
Etihad gave no indication whether it was working with any other investors that might take a majority stake in Jet.
Once India’s largest private airline, Jet was crippled by mounting losses as it tried to compete with low-cost rivals IndiGo and SpiceJet.
Jet, which also owes vast sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from April 17 after its lenders, led by SBI, refused to extend more funds to keep the carrier flying.
Etihad was among four investors that submitted initial bids for the airline last month. The others were private equity firms TPG Capital and Indigo Partners and Indian wealth fund National Investment and Infrastructure Fund (NIIF).
SBI has also received two unsolicited, non-binding bids for Jet, the bank’s Chairman Rajnish Kumar told reporters, after a news conference on Friday, adding it had no plans at this time to drag the airline into a bankruptcy process
“(We’ve) made disproportionate efforts to keep Jet flying,” Kumar said.
Jet for several months tried to convince investors, including Etihad, to pump in money and save the airline. But several potential investors had at least one condition — Jet’s founder and former chairman Naresh Goyal must cede control.
When Jet failed to garner interest, the banks, led by SBI, moved in with a rescue plan which was first announced in February and put into action in March after Goyal stepped down.
“A few unsolicited offers have also been received which the lenders may deliberate upon subsequently,” SBI Capital Markets said in a statement without giving further details.
Analysts are skeptical the sale process will succeed.
“The process of bidding and winning isn’t so easy,” said HDFC Securities analyst Deepak Jasani. “Day by day, losses and loans are rising at Jet, the more the process is delayed the more the situation becomes irreparable,” he said.
While the bid process was on, Jet was forced to vacate its offices at many airports across the country and employee access was revoked. Lessors also forced Jet to ground dozens of planes over non-payment of dues and it is left with just 13 aircraft, a senior SBI source told Reuters.
At its peak, 26-year-old Jet operated over 120 planes and well over 600 daily flights, flying Bollywood film-stars, politicians and business tycoons across India and the world.
If a deal fails to materialize, the airline could be dragged into bankruptcy by creditors, putting thousands of jobs at risk.


Google puts up $1B to ease housing headaches it helped cause

In this May 1, 2019, file photo, a woman walks past a Google sign in San Francisco. Google is making a $1 billion commitment to address the soaring price of housing in the San Francisco Bay Area, a problem that the internet company and its Silicon Valley peers helped create as the technology industry hired tens of thousands of high-paid workers. (AP)
Updated 13 min 12 sec ago
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Google puts up $1B to ease housing headaches it helped cause

  • A report by Working Partnerships called upon Google to build more than 17,000 homes in the area to help offset the anticipated price increases caused by the new campus

SAN FRANCISCO: Google is pouring $1 billion into easing the high-priced housing headaches that it and its Silicon Valley peers helped give the San Francisco Bay Area.
The pledge announced Tuesday by Google CEO Sundar Pichai consists of a $250 million investment fund and $750 million of company-owned land. It will be used to build at least 15,000 homes that will include low- and mid-income housing.
Google’s commitment eclipsed a recent $500 million pledge made by Microsoft to combat housing shortages in the Seattle area and a $500 million housing fund created by a consortium including Facebook.
Google is extending a helping hand as it draws up plans to expand into sprawling offices beyond its headquarters in Mountain View, California. That suburban city of roughly 80,000 people has been swamped with affluent tech workers since Google moved there shortly after its 1998 inception.
Since then, Google’s payroll has swelled from a few dozen workers to the more than 103,000 people now working for it and its corporate parent, Alphabet Inc. Nearly half of those workers are based in the Bay Area.
While Google has been expanding, so have a wide variety of other technology companies, including Apple, Facebook, Oracle, Salesforce and Netflix — all of whom also lavish their workers with six-figure salaries and stock options that can yield multimillion-dollar windfalls.
The high incomes have resulted in bidding wars for the limited supply of homes in the Bay Area that can only be afforded by the affluent, a group increasingly dominated by tech workers, while people employed in other lines of work struggle to make ends meet on more modest incomes.
That is making it impossible for people on the lower end of the economic spectrum to buy a home in the Bay Area, where a mid-priced house sold for $990,000 in April, according to the California Association of Realtors, a trade group. In 1999, a mid-priced home sold for $308,000.
It’s even worse in San Francisco, a city from which many tech workers ride company buses to the Silicon Valley suburbs. A mid-priced house in San Francisco sold for nearly $1.7 million in April, according to the realtors’ group, quadruple the price of 20 years ago.
Google’s next big project will be in the Bay Area’s most populous city, San Jose, where it plans to build a corporate campus consisting of offices and housing where 15,000 to 20,000 of its employees will work and live.
The project faced resistance from community activists worried about its effect on housing prices. Last week, a report by Working Partnerships called upon Google to build more than 17,000 homes in the area to help offset the anticipated price increases caused by the new campus. The report by the labor-union backed labor group envisions apartment rent increases of $235 million by 2030 if action isn’t taken.
“For several months, we have encouraged Google to make a bold commitment to address our region’s affordable housing challenge,” San Jose Mayor Sam Liccardo said in a statement applauding the company’s $1 billion pledge.