SINGAPORE/NEW DELHI - Prospective bidders of struggling Jet Airways Ltd need to settle the airline's existing debt as part of any deal to buy a stake in the carrier, its consortium of lenders led by State Bank of India (SBI) said in a statement on Monday.
Jet's lenders last month agreed to bail out the airline in a complex deal that involved the banks taking a temporary majority stake in the company - while they look for a new investor - and providing a fresh loan of $218 million.
In a notice on its website, SBI Capital Markets, a unit of SBI, said that prospective bidders are required to submit expressions of interest for up to 75 percent stake in debt-laden Jet by 6 pm local time (1230 GMT) on April 10.
Individuals, including foreign nationals, as well as a consortium of up to three companies are allowed to bid for a stake in the airline subject to Indian laws, the notice said. Foreign ownership of Indian airlines is capped at 49 percent.
KKR, Blackstone, TPG Capital among others are said to be in talks with consultancy firms to conduct due diligence in Jet, according to Bloomberg Quint.
Jet's lenders, under the proposed bailout terms, would hold just over 50 percent of the airline, its founder and former chairman Naresh Goyal would hold 25.5 percent and Jet's second-largest shareholder Etihad Airways' stake would be 12 percent.
It was not immediately clear if Goyal and Etihad would also sell their stake as part of the auction.
Jet, saddled with more than $1.2 billion of debt, owes money to banks, lessors, suppliers and pilots. It has been forced to ground more than three-quarters of its fleet of 119 planes, leading to hundreds of flight cancellations.
India is keen to save Jet to prevent thousands of job losses, which could potentially dent sentiment days ahead a federal election in which Prime Minister Narendra Modi seeks to secure a second term.
The government was forced to shelve a plan to sell its stake in state-run Air India last year after it failed to attract bids from investors in part due to the airline's debt of over $5 billion.
Even as Jet's lenders approved a bailout plan, there is no decision yet on whether the interim loan of $218 million would be given to the airline, a source has told Reuters, forcing Jet to further delay payments and dues.
About six lessors are expected to apply to India's aviation regulator over the next few days to de-register up to 15 planes that have already been grounded, a source has told Reuters.
Jet's lenders said last week they would consider other options should the stake-sale process "not result in an acceptable outcome".