Creditors' hopes of resurrecting Jet Airways and salvaging some value from the bankrupt airline were dealt a fresh blow on Monday as two potential investors said they were no longer interested in putting money into the business.
The billionaire head of Vedanta, Anil Agarwal, whose family trust Volcan Investment had said it was looking at taking a stake in Jet, backed out on Monday.
Etihad Airways, which already owns a minority stake in Jet, also said it was not interested in reinvesting in the airline.
The announcements are a setback for creditors hoping to recover a portion of the more than $3 billion that the airline owes to its lenders, lessors, staff and other suppliers.
"The EOI (expression of interest) for Jet Airways by Volcan was exploratory in nature. On further evaluation and considering other priorities, we intend to not pursue this further," Volcan said in a brief statement, a day after it had disclosed it had submitted an EOI for the airline.
The firm declined to provide any detail on its reasoning.
Separately, Abu Dhabi's Etihad said it was not interested in reinvesting in Jet because of unresolved issues concerning the airline's liabilities.
"Etihad remained engaged in the process, but despite the endeavours of everyone involved there remained very significant issues relating to Jet's previous liabilities," it said.
Etihad acquired a 24 per cent stake in Jet in 2013, at a time when the carrier had needed significant financial support.
A total of three EOIs have been received for Jet after prospective bidders were invited to express interest, according to media reports.
With Volcan out, only two potential bidders likely remain in the fray.
Resolution professionals are examining the EOIs and are likely to announce the names that make the cut on August 13, according to a source familiar with the matter. The only criterion for bidders is having a net worth of Rs 1,000 crore ($140 million).
Prior to entering the bankruptcy court, Jet's lenders had run a similar sale process that failed to attract any binding offers from bidders that met the cut-off criteria.
Some analysts are concerned the same problems are playing out again, further eroding any value left in Jet.
"Nothing has changed at all in the last few months, the Jet deal has been stuck in a limbo and we haven't moved forward. We are again back to the EOI stage and uncertainty remains," said an aviation analyst, requesting anonymity.