State Bank of India (SBI) and executives of Jet Airways met late on Wednesday to approve the appointment of A K Purwar, former SBI chief, to take over as chairman of Jet Airways as an interim arrangement.
The meeting also discussed a long-term strategy to save the debt-laden carrier which is yet to shortlist a suitor to take over its management. Meanwhile, bankers have extended the timeline to submit the Expression of Interest (EOIs) to April 12 for the third time to give more players adequate time to participate. Binding bids have to be submitted by April 30.
SBI Caps, the merchant banker appointed to find a new owner, said in a release late on Wednesday, "As part of the process, we are in receipt of some EOIs and some more persons have expressed desire to participate if additional time is provided. In order to allow for better participation, lenders have agreed to extension of timeline."
Air Canada, AirAsia and Vistara are some of the airlines which have made enquiries on the bidding process for taking over Jet Airways. Lenders are offering to offload up to 75% stake in the airline.
The binding bids have to be submitted by April 30, 2019.
"There are a lot of inquiries from different investors. Air Canada, Air Asia and Vistara made some preliminary inquiries. Some of the bidders wanted to come as a consortium to share the cost of taking over the airline," said a banker.
On Wednesday, Jet Airways's shares fell 1.59% to Rs 263.40 apiece on BSE.
To be certain that genuine parties are bidding, SBI Caps, the merchant banker undertaking the task, said all members of the consortium have to provide their details, which then have to be certified by their managing director or chief executive director.
Meanwhile, fuel supplies from Indian Oil Corporation (IOC) to Jet were cut from 3 pm on Wednesday, accentuating the problems for the airline which is operating with just 26 planes, down from the 119 it was operating until December 2018 when it defaulted on its repayments.
From January, Jet has not paid salaries to its employees and lessors have taken possession of its planes.
According to IOC sources, the fuel supply to Jet Airways was stopped at about 3 pm and resumed by 8:30 pm. "Thediscontinuation happened across all the airports of the country where Jet Airways operates," the official said. However, a Jet Airways spokesperson refused to comment and neither did he specify the number of flights that were affected due to it.
The fuel supply was also discontinued on March 4 and 5 and was restored only after the airline management assured of the payments. Further, the lenders stepped in to make some payment in this regard, the sources said.
To add to the airline's woes, aviation regulator Directorate General of Civil Aviation announced on Wednesday it de-registered seven Boeing 737-800 aircraft of Jet. This paves way for the lessors to leased the planes to any other airline.
As per the DGCA website, the seven de-registered Boeing aircraft belong to Crolly Aviation, Mardal Aviation, Allenwood Aircraft Leasing, Dungarvan Aircraft Leasing, Elphin Aircraft Leasing, Carlow Aircraft Leasing and Ballyhaunis Aircraft Leasing.
DGCA also showed on its website that lessors have put in IDERA (irrevocable deregistration and export request authorisations) requests to de-register 24 other aircraft, which were leased to Jet Airways.
The resolution plan to rescue the airline could not be signed after the Supreme Court struck down the February 12 circular of Reserve Bank of India (RBI). Bankers have planned theconversion of debt into equity at Re 1, as prescribed in this circular. The airline had also taken Board approval to convert11.4 lakh shares at Re 1, and then infuse Rs 15,00 crore funding. But now the bankers are waiting for RBI to come up with a revised framework for the restructuring of the airline's debt.
Lenders had in February laid the ground for a new owner in Jet Airways after they managed to force founder-chairman Naresh Goyal and his wife Anita to resign from the Board of the airline and give an undertaking that they would be open to bringing down their stake from 51% to about 9%. Abu Dhabi-based Etihad agreed to exit from the ailing airline in stages.
The lenders' consortium led by SBI then called for open bids to sell Jet Airways after obtaining written agreements from Goyal and Etihad.
Goyal, who currently owns 51% of Jet Airways, would have no voting rights if the resolution is approved. Etihad, whose holding is at 24%, according to the plan had to agree to sell its entire stake if it does not bring in new capital. In the first stage, Goyal will own 25.5% of Jet Airways, down from 51%, after conversion of debt into equity at Re 1 a unit. Etihad's stake will fall from 24% to 12% while banks will hold 50% of Jet Airways. Banks have kept a deadline of June 30 to offload the stake.
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