Lenders, including IDBI Bank and Punjab National Bank, reportedly have outstanding debt worth Rs 8,000 crore from Jet Airways, while dues with operational creditors are much larger.
The Hinduja group is likely to put a formal bid for crisis-ridden Jet Airways as early as this week, sources said. Ongoing discussions between the Hinduja group, Etihad Airways and lenders to Jet Airways gathered steam after June 20, when the National Company Law Tribunal (NCLT) had passed an order, initiating insolvency proceedings against the grounded airline.
“Discussions have been fast-tracked with the insolvency plea being filed. We had been working with an internal deadline of mid-July to finalise the details, but a formal bid could be submitted to the interim resolution professional this week itself,” said a source.
“Etihad Airways has worked consistently to find a solution which would enable Jet Airways to be reactivated as a viable entity. We will continue to constructively evaluate participation in potential solutions,” a spokesperson from the Abu Dhabi-based airline had said earlier.
On June 17, State Bank of India (SBI) had decided to file the insolvency plea against Jet Airways. “Lenders have decided to seek resolution under IBC (the Insolvency and Bankruptcy Code) since only a conditional bid was received and requirement of the investor for Sebi (Securities and Exchanges Board of India) exemptions and resolution of all creditors is possible under IBC,” SBI had said in a statement.
According to SBI’s plea, the bank had extended loans worth Rs 1,729.21 crore to Jet Airways. The airline has outstanding working capital debt worth over Rs 462 crore with the bank. It also owes over Rs 550 crore towards pending salaries to its pilots and over Rs 6.70 crore to two operational creditors, who have been made party to the insolvency petition.
The court-appointed interim resolution professional has invited all creditors to file their claims by July 4 and will submit the first fortnightly report on July 5. Lenders, including IDBI Bank and Punjab National Bank, reportedly have outstanding debt worth Rs 8,000 crore from Jet Airways, while dues with operational creditors are much larger.
The lenders of the defunct airline had sought bids for a majority stake in the airline in April. Etihad Airways, Jet’s strategic partner, was the only serious party to show any interest, but it put multiple conditions. Lenders were not keen on bids received from several unsolicited bidders. Last week, London-based Adi Group announced that it would be bidding for a 75% stake in Jet Airways, along with a section of employees of the airline. According to several reports, the Tata group is considering bidding for assets of the airline, should it go into liquidation.
Jet Airways halted operations on April 17 after lenders had rejected its request to provide emergency funding. The civil aviation ministry has allotted a significant portion of the airline’s slots in major airports to other scheduled carriers. The slots, which were initially reallocated for three months, will now be extended until October. The airline has also seen a slew of resignations from the top management since May 13.