INSUBCONTINENT EXCLUSIVE:
The Abu Dhabi-based carrier plans to raise its stake in Jet Airways from the current 24 per centEtihad Airways has appointed turnaround
specialist Alvarez Marsal to conduct due diligence on Jet Airways as it weighs bailing out the cash-strapped carrier, three sources
familiar with the matter told Reuters
Executives from Alvarez Marsal are camped in Jet Airways' offices in Mumbai and are taking stock of the airline's operations and looking
into its financial health and records, one of the sources said.The Abu Dhabi-based carrier plans to raise its stake in Jet Airways from the
current 24 per cent but it wants the airline's founder and chairman Naresh Goyal to give up control, sources have told Reuters."Alvarez
Marsal are restructuring consultants
If they are there it means they are looking for stuff to cut," said a second person who is familiar with the matter.An Etihad spokeswoman
Alvarez Marsal did not immediately respond to an email seeking comment.Jet Airways did not respond to an email seeking comment but said
last week it is in talks with lenders to resolve its debt problems
It is seeking a cash injection by stakeholders and will make board changes.Jet Airways, which controls a sixth of the country's booming
aviation market, desperately needs a bailout
High fuel taxes, a weak rupee and price competition have squeezed profitability, leaving the airline with net debt of $1.13 billion.Earlier
in January it defaulted on a debt payment to a consortium of banks, led by State Bank of India (SBI), prompting ratings agency ICRA to
downgrade the carrier.The airline also owes money to employees, vendors and lessors - some of whom are considering taking back aircraft,
sources have told Reuters.Jet Airways brought on board two global consultants last year who also have people working out of the airline's
office in Mumbai, the first source said
McKinsey is helping with cost-cutting efforts and Boston Consulting Group (BCG) is looking at ways to increase revenue, he added.McKinsey
did not respond to an email seeking comment
BCG said it would not comment on any company specific matters.Representatives of both airlines met with creditors, led by Jet's biggest
lender SBI, in Mumbai last week to discuss a proposal that involves Etihad increasing its 24 per cent stake, a source told Reuters.The Abu
Dhabi carrier can go up to a maximum of 49 per cent according to foreign ownership rules for airlines
Also, if it breaches the 25-per cent mark it must adhere to strict capital markets rules.The markets regulator, Securities and Exchange
Board of India (Sebi), said on Thursday it had not yet expressed any "view" on giving such a concession to Jet or Etihad.
