Crisis-ridden Jet Airways has tapped investment bank Moelis & Co to manage the stake sale in its loyalty program JetPrivilege.
The decision comes in the midst of an economic downturn for the company. The airline is already in advanced discussions with private equity companies TPG Capital and Blackstone for the sale and will choose one of them shortly.
The airline hasn’t disclosed a valuation for its loyalty program but to potential investors it has cited a report by global independent consultant On Point, which has valued the business at $1.13 billion.
Etihad owns 50.1 percent of the loyalty program, while Jet Airways owns the rest. This will be the first step the financially-troubled carrier is taking to shore up its finances.
This will be the first airline-related deal in India headed by Moelis. In August, the bank managed Montreal-based loyalty analytics company Aimia’s $2.1 billion sale of its Aeroplan loyalty business.
In February, it managed New York-based defense and aerospace company L3 Technologies’ sale of its Vertex Aerospace business valued at $540 million to private equity firm American Industrial Partners.
The airline has yet to specify the stake it wants to offload but employees have said it would sell “a large part of its stake” although it would “consider itself unwise” to completely exit the business.
Jet Airways has been passing through its worst financial and operational phases since inception.
Last month, senior management employees took pay cuts as high as 25 percent. The company recently asked pilots and technicians to take similar cuts but they refused.