Employees of grounded carrier Jet Airways are unlikely to get their dues — salaries and other emoluments — amounting to Rs 93 crore, anytime soon after lenders on Thursday expressed their inability to provide any further funds, sources told FE. The airline’s senior management, pilots and engineers have not been paid since January while other employees have not been paid since March.
The committee of creditors (CoC) had in July approved interim funding to the tune of Rs 70 crore for maintenance and upkeep of Jet’s assets and to cover some costs of the corporate insolvency resolution process. Of this, State Bank of India has released Rs 10 crore while other lenders are yet to provide funding, sources said.
At its second meeting on Thursday, the CoC discussed the evaluation criteria for potential bidders and terms for the requ-est-for-proposal document.
Lenders also discussed the evaluation criteria for potential bidders and the terms for the request-for-proposal document. The resolution professional had invited EoI from interested bidders for the resolution of Jet Airways on July 20. The last date for submission for EoIs is August 3.
On August 6, the CoC will finalise a list of eligible prospective resolution applicants and circulate the request-for-proposal, inviting the formal bids. The deadline for submitting resolution plans is September 5, and the plan is expected to be submitted to the NCLT for its approval on September 20. “The evaluation matrix will help select a bidder, it includes parameters like the financial strength of the bidder, their experience and how much debt they are able to pay off, among others,” one source said. Several bidders have sought clarifications on the the expression of interest (EoI) conditions for the resolution of Jet Airways, sources said. The Hinduja group has been in ongoing discussions with Etihad Airways to put in a formal bid for the airline.
Last month, the National Company Law Tribunal (NCLT) had directed the resolution professional (RP) of Jet Airways to discuss concerns over payment of salaries with the CoC, citing the necessity of ensuring payment for ‘survival of employees’. According to a person aware of the proceedings, the issue of salaries was discussed. “While lenders are sympathetic, they expressed their inability to release further funding at this stage,” he said. On June 20, the NCLT initiated insolvency proceedings against the airline following an application moved by the State Bank of India. In its order, the NCLT sought a speedy resolution for Jet Airways as it was considered a matter of “national importance.” While passing the order, Judge VP Singh urged that the resolution process should be completed within 90 days.
Jet Airways halted operations on April 17 after lenders refused to provide emergency funding. Since then, the ministry of civil aviation has re-allocated the Jet’s slots to other airlines on a temporary basis till October. As on June 15, Jet’s fleet consists of 12 aircraft — Six Boeing 777, three Airbus 330 and three Boeing 737. Of these, Jet owns only the three Boeing 737, while the rest of the aircraft are on financial lease.