INSUBCONTINENT EXCLUSIVE:
By George Smith Alexander and P R SanjaiBlackstone Group LP is in talks to buy a stake in the loyalty program of Jet Airways India Ltd., the
expressed interest in a deal that could value Jet Privilege at about Rs 3,000 crore ($429 million) to Rs 4000 crore, according to the
people, who asked not to be identified because the information is private
one of the people said.
Etihad owns 50.1 percent of the loyalty program, while Jet Airways owns the rest
The transaction being contemplated by Blackstone would see both Jet Airways and Etihad remain investors in Jet Privilege, another person
said.
Any deal would be dependent on Jet Airways also securing adequate funding for its airline operations, according to the person
said.
Jet Airways is racing for funds as rising crude oil prices and intense competition in the Indian market eroded its cash amid losses
representative for Etihad declined to comment
Jet Airways referred to its statement issued Monday, saying reports on any move to monetize its investment in the loyalty program are
airline or spending on co-branded credit cards
Those miles can be accumulated to buy almost everything from air tickets to clothes and groceries at partner merchants.
Membership in the
JetPrivilege loyalty program grew 30 per cent to 8 million customers in the year ended March 31
Etihad, which owns 24 percent of the Indian carrier, bought its stake in the loyalty program in 2013 for about $150 million.
Negative
OutlookAny cash from a stake sale would provide some respite for the Mumbai-based company, which faces Rs 3,120 crore worth of loan
repayments due in the year through March 2019, according to ICRA Ltd
signals moderate risk of default regarding timely servicing of obligations, citing its inability to pass on increasing fuel costs to
instead before they would commit to any fresh credit, people familiar with the matter said earlier this week
according to the people.
The carrier had total debt of Rs 9,430 crore at the end of March, according to data compiled by Bloomberg
the data show.
The company needs as much as $500 million in cash immediately and must refinance $400 million of debt, backed by a guarantor,
to keep the business sustainable, Kapil Kaul, South Asia CEO for CAPA Centre for Aviation, said earlier.
Other airlines that have sold
stakes in their loyalty programs include Virgin Australia Holdings Ltd
Partners for A$336 million ($242 million).
