The carrier was declared bankrupt in Amsterdam over the liability of Rs 150 crore to overseas lessors
Hinduja Group's plan to acquire Jet Airways is stuck after a Dutch court declared the ailing airline bankrupt last week.
On the day Jet's lenders were to meet Hindujas and Etihad officials in Dubai last week, the carrier was declared bankrupt in Amsterdam over the liability of Rs 150 crore to overseas lessors. The bankruptcy order was at the request of two unnamed European creditors.
"The declaration of bankruptcy scuttled the talks. The bankers were to meet and discuss the road map for the future when a Dutch court declared Jet Airways bankrupt with a demand for a payment of Rs 150 crore," a banker close to the development said.
NO RESOLUTION
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- The carrier was declared bankrupt in Amsterdam over the liability of Rs 150 crore to overseas lessors.
- The bankruptcy order was at the request of two unnamed European creditors.
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Lenders, led by State Bank of India (SBI) chairman Rajnish Kumar, are trying to find a solution to the current problem, but sources said that bankruptcy proceedings have forced the Hindujas to develop cold feet. Unless the lenders assuage the fears of the investors the deal will be difficult to fructify. SBI Caps has been entrusted with the responsibility of finding a buyer while the bankers are holding negotiations with the investors.
"Though the liability is not big, when a bankruptcy call is made in one geography, there are fears that more such calls may come. There is also a fear that the current liability is interconnected with other loans the group may have taken," said a banker, who is part of this consortium of domestic banks.
Meanwhile, Jet Airways share price closed, up 1.92% at Rs 151 on BSE on Monday. The share price was Rs 1,248.75 a year back on May 28, 2018.
This is the second time that the revival of the airline is getting derailed. The first instance, according to bankers close to the development, was when the lenders were about to ink a resolution plan that allowed them to take over 30% of Naresh Goyal's stake at Re 1 a share. The Supreme Court nullified the February 12 Circular which prevented the Goyal's share to be converted. Goyal is still the largest shareholder at 51%, while Etihad owns 24% in the airline.
But the problems of the airline took another ugly twist when Goyal and his wife Anita were offloaded from a Dubai-bound flight in Mumbai last Saturday following a lookout circular issued against them by Ministry of Corporate Affairs and Serious Fraud Investigation Office (SFIO).
The airline's massive debt of Rs 11,261 crore is another sore point for the investors who want a deep discount from banks as huge investment is also required to restart the airline.
A few months back, a cargo handler and a creditor requested for grounding of Jet's Boeing 777 aircraft last month in Amsterdam, which had been on the tarmac at Schiphol over unpaid dues.
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