India’s Jet Airways slumps following Etihad bid report

Shares in Indian budget carrier Jet Airways, down 70 percent in the past year, tumbled again yesterday after doubts were raised over a bid by Etihad. (Reuters)
Updated 14 May 2019
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India’s Jet Airways slumps following Etihad bid report

  • Jet owes vast sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from April 17
  • The move followed refusal by its lenders to extend more funds to keep the carrier flying

BENGALURU, India: Shares of Jet Airways Ltd. fell as much as 11.4 percent on Monday after media reports said a buyout offer from Middle Eastern carrier Etihad Airways was non-binding and might not guarantee a deal for the struggling Indian carrier.

Etihad, which owns a stake of about 24 percent in Jet, submitted a bid for the airline, representatives of the State Bank of India (SBI) unit overseeing the sale of the stricken carrier said on Friday. 

That had raised hopes of a bailout for cash-strapped Jet, which has about $1.2 billion in bank debt.

The Mint newspaper said on Monday that Etihad wanted a commitment from banks on additional loans once it infuses equity into the company. The Middle Eastern carrier had not been able to find a local partner and lenders may need to take an 80 percent cut on their outstanding loans to Jet Airways, the newspaper said, citing banking sources. Shares of the carrier, which have tumbled almost 70 percent over the past year, were down 5 percent as of 4:45 a.m. GMT.

Jet, which owes vast sums to its lessors, pilots, fuel suppliers and other parties, stopped all flights from April 17 after its lenders refused to extend more funds to keep the carrier flying.

SBI also received two unsolicited, non-binding bids, the bank said on Friday. Jet and SBI were not immediately available for comment.


Oil rises on US-Iran tensions, but trade war concerns weigh

Updated 27 min 5 sec ago
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Oil rises on US-Iran tensions, but trade war concerns weigh

  • There are expectations producer club OPEC will continue to withhold supply this year
  • President Donald Trump on Monday threatened Iran with ‘great force’ if it attacked US interests in the Middle East

SINGAPORE: Oil prices rose on Tuesday on escalating US-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year.
But gains were checked by concerns that a prolonged trade war between Washington and Beijing could lead to a global economic slowdown.
Brent crude futures, the international benchmark for oil prices, were at $72.24 per barrel at 0534 GMT, up 27 cents, or 0.4 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were up 26 cents, or 0.4 percent, at $63.36 per barrel.
“Escalating tensions between the US and Iran, in addition to signs that OPEC will continue its production cut, drove oil higher,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
US President Donald Trump on Monday threatened Iran with “great force” if it attacked US interests in the Middle East. This came after a rocket attack in Iraq’s capital Baghdad, which Washington suspects to have been organized by militia with ties to Iran.
Iran said on Tuesday that it would resist US pressure, declining further talks under current circumstances.
The tension comes amid an already tight market as the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been withholding supply since the start of the year to prop up prices.
A meeting has been scheduled for June 25-26 to discuss the policy, but the group is now considering moving the event to July 3-4, according to OPEC sources on Monday, with its de-facto leader Saudi Arabia signaling a willingness to continue withholding output.
Price gains were constrained by pressure on financial markets, which have this week been weighed down by worries that the United States and China are digging in for a long, costly trade war that could result in a broad global slowdown.
Singapore, seen as a bellwether for the health of the global economy, on Tuesday posted its lowest quarterly growth in nearly a decade of 1.2 percent year-on-year. Growth in Thailand, a key Asian emerging market, also slowed to a multi-year low.