SBI says no plan to buy Etihad’s stake in Jet Airways

State Bank of India said it has no plans to buy the 24% stake owned by Abu Dhabi-based Etihad Airways in embattled Indian carrier Jet Airways.

The report ” is factually incorrect and no such transaction has been contemplated,” SBI said in a statement today.

The clarification comes in the wake of heavy criticism that the government is putting good money after bad in trying to keep the private company going.

State Bank of India, owned by the state of India, has exposure worth thousands of crores of rupees to the Naresh Goyal promoted airline.

However, the airline has had most of its planes grounded in recent days due to accumulated debt and poor financial performance, accentuated by the recent spike in jet fuel costs.

State Bank of India had suggested a rescue and turnaround plan for Jet Airways, which is currently under consideration of the board.

Even without any deal with Etihad, SBI may end up getting control of the airline if Jet Airways fails to find some way of getting the planes back in the air and resuming operations.

There have been persistent rumors and reports that Etihad Airways is keen to exit the company by selling its shares at a discount to their market price to anyone interested.

Market observers have criticized rumored moves by the government to loan or invest money into the ailing airline.