It's back to square one for Jet Airways, with the airline once again relying on a reluctant Etihad Airways to come to its rescue.

CNBC-TV18 reported on May 10 that Etihad Airways was the only shortlisted suitor to come forward and place a bid for Jet Airways as the deadline to submit bids ended.

Abu Dhabi-based airline's bid, however, is a non-binding bid, as per the statement issued by the airline which promised an investment only if its conditions were met.

Sources privy to the developments told CNBC-TV18 that Etihad Airways has once again reiterated that it will not participate in any open offer, and will therefore not take its stake beyond 24 percent that it currently holds.

Etihad has offered fresh equity infusion to the extent of Rs 1,700 crore if its conditions are met, according to multiple people familiar with the development.

Banking sources said that lenders would look to convert part of Etihad Airways' debt into equity to take a significant stake in the airline, which would result in the dilution of existing shareholders' stake, including Etihad Airways and promoter Naresh Goyal.

As per of the offer made by Etihad Airways, it has promised to invest to the extent of taking its stake back to 24 percent, after the dilution, said people familiar with the matter.

Further, Etihad Airways' offer includes a strategic partner coming in to take care of the majority of Jet Airways' capital requirement, as per sources.

While Etihad has promised to engage with partners, banks will also simultaneously conduct talks with potential strategic investors to invest in the airline, said people in the know.

State Bank of India (SBI) chairman Rajnish Kumar told CNBC-TV18 earlier that the lenders will present the plan to National Investment and Infrastructure Fund (NIIF) as well.

Last week, the SBI-led consortium of lenders to Jet Airways Friday said it had

received bids from Etihad Airways and from a few unsolicited parties to acquire a stake in the grounded airline.

The consortium of 26 lenders, which now owns 51 percent in the airline, had invited expressions of interest between April 8 and 12 and had received four preliminary bids. The lenders are offering 31.2-75 percent stake in the company on a fully diluted basis.

SBI Caps, which has been mandated for the sale, in a statement said, "sealed bid from Etihad Airways has been received and the same will be submitted to lenders for examination."

It has also received a few unsolicited offers, which the lenders may deliberate on subsequently, the statement said, adding the banks are likely to evaluate bids next week. Jet Airways ceased operations temporarily on April 17 due to acute financial distress.

First Published:May 13, 2019 9:29 PM IST