EoI submission deadline extended to August 10 on the request of the Gulf-based airline
This may be the last-ditch effort to rescue Jet Airways.
Etihad Airways, the joint venture partner with a 24% per cent stake in the beleaguered airline, has requested the creditors to give them more time to submit expression of interest (EoI) in the bankruptcy court.
"It was after Etihad Airways, one of the Jet's largest shareholders, put in a request that the committee of creditors (CoC), which had met on Friday, gave an unconditional nod to extend the deadline for submitting the EoI," said a banker who attended the meeting.
THE LAST ATTEMPT
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- If there are no credible bidders, then the airline will have to proceed for liquidation
- On June 20, NCLT admitted Jet Airways under IBC after lenders moved the court
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- Rs 8,500 crore – Jet Airways owes to lenders
- over Rs 10,000 crore it has to pay to its vendors
- Rs 3,000 crore – Dues of its employees
- Rs 13,000 crore – loss the airline has incurred in the last few years
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Bidders now have time till August 10 to submit their bid.
"If there are no credible bidders, then the airline will have to proceed for liquidation," said the banker.
"We are hoping that Etihad will come with a credible plan which can be implemented," he added.
Jet Airways, which is now admitted in the Mumbai Bench of the National Company Law Tribunal (NCLT), is waiting to see if there are any credible bidders to fly it out of the financial mess.
On June 20, the Mumbai bench admitted Jet Airways under Insolvency and Bankruptcy Code (IBC) after a consortium of 26 lenders, led by State Bank of India (SBI), referred it to the bankruptcy court. The airline was grounded on April 17 as it ran out of cash. Jet owes over Rs 8,500 crore to lenders, over Rs 10,000 crore to its vendors, a majority being the aircraft lessors, and over Rs 3,000 crore to its employees, who have not been paid since March. The airline is having negative net worth for a long time, and has run a loss of over Rs 13,000 crore in the past few years.
In late June, the resolution professional Ashish Chhawchharia had floated EoIs for selling stake in the airline. The deadline for receipt of EoIs was kept at August 3.
In April this year, the Hindujas had come as a knight in shining armour to be a majority partner. But just when the bankers were to meet the potential investors in Dubai to discuss the takeover, a court in Amsterdam declared the airline bankrupt over the liability of Rs 150 crore. Fearing other liabilities, Hindujas backed out.
"This is to bring to the attention of all interested resolution applicants that the revised deadline for submission stands at 4 pm (India time) on 10 August, 2019," said Ashish Chhawchharia, Jet Airways' resolution professional in a note on Saturday.
"The proposed extension is to ensure the objectives of the IBC are achieved and we are able to maximise the value of the assets of the corporate debtor and achieve a better outcome for all stakeholders in this fast-track process," the note said.
OPINION
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'RESOLVE THE CASE EARLY' The expectation is that some bidder will come and take over Jet. But the bidder has to meet the terms of the lenders consortium and the employees. Even on June 20, when the NCLT had admitted the petition the court was of the view that the case is of national importance and the employees' welfare is of prime importance. The court said that the case needs to be resolved in three months' rather than the usual time of six months. There is a big demand for an airline like Jet Airways. There is a void in the lucrative sectors like Mumbai-London or Delhi-London. Vineet Naik, senior advocate, Bombay High Court
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