Lenders of troubled carrier Jet AirwaysNSE -0.12 % have decided to call buyers interested in the airline to submit expression of interest starting April 6 as part of their resolution plan. The move is fallout of lenders hoping to sell their stake after the Supreme Court set aside the Reserve Bank of India’s revised framework for the resolution of stressed assets. The bids would close on April 9, 2019.
The Supreme Court ruling could stall the airline board’s plan wherein lenders would take over the airline’s debt and convert it into 11.4 crore shares for just Re 1. “The lenders are cognizant that the outcome of the efforts of the lenders will depend on the interest shown by the parties on sale of stake in the company. Whilst all efforts will be made for the stake sale by the lenders, other options may be considered by the lenders, should these efforts not result in an acceptable outcome,” said a statement from lenders of Jet Airways.
It was, however, not clear whether the bids will be called for the 50.1% stake in the airline that banks own or for the 25.5% owned by Naresh Goyal and 12% owned by Etihad. The latest resolution plan deviates from an earlier one that was to provide a loan of Rs 1,500 crore to Jet Airways to partially fund the operations of the airline, which has still not reached the airline in full. A decision, however, to advance the whole process would mean that banks see urgency in finding a new buyer for the operationally struggling airline.
It was also unclear if these lenders will provide funding for operations of the beleaguered carrier that is facing its worst financial crisis and has its fleet shrunk to 26 aircraft from 103 at its peak. The airline is also struggling to make payments to vendors — lessors are grounding planes and oil companies briefly stopped fuel supply at Delhi airport on Thursday evening.
The decision to advance the bidding process was taken at a lenders’ meet held in Delhi on Thursday and was attended by all lenders as well as Jet Airways CEO Vinay Dube and CFO Amit Agarwal. Dube met aviation secretary P S Kharola here on Thursday night soon after banks’ meeting. Both Dube and Kharola declined to get into specifics of what transpired at the bankers meeting earlier today.
