LM: Four potential bidders show early interest in troubled Jet Airways

1 August 2019: As many as four potential bidders have evinced interest in Jet Airways (India) Ltd, a person with direct knowledge of the matter said, though talks for a potential bid are still in early stages.

SBI Capital Markets, which is advising the lenders in the process of finding new investors for the grounded airline, has reached out to as many as 20 potential investors, the person said, requesting anonymity.

“Among these, four parties have shown initial interest to bid for Jet Airways,” the person cited above said on condition of anonymity.

The airline’s committee of creditors (CoC) met on Thursday to discuss issues related to its insolvency proceedings. The lenders decided that they would extend the deadline for bids if the airline failed to attract suitors by Saturday.

State Bank of India (SBI), which leads the lenders’ consortium for Jet Airways, has sanctioned ₹10 crore as a part of the approved interim funding of $10 million (about ₹69 crore) for the airline, which was decided by the lenders earlier in July. “Other banks are expected to follow suit and sanction their part of the funding in the coming days,” the person added.

Besides maintaining Jet Airways’ planes and other assets, the interim funding will also be used to hire people on contract to verify various creditor claims.

The lenders, however, have reservations about releasing a month’s salary for Jet Airways’ staff as sought by several worker unions, said another person aware of the matter.

Jet Airways, which grounded its operations in April, due to an acute fund crunch, is yet to pay salaries since January to a section of its staff such as pilots, engineers and general managers. The airline hasn’t paid salaries to the rest of its staff since March.

On 20 June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC) after lenders referred it to the bankruptcy court.

The group of 26 banks, led by SBI, have approached the tribunal to recover dues of more than ₹8,500 crore. The lenders have been trying to sell Jet Airways for the past five months without success.

The LiveMint reported



Categories: General News, India Bankruptcy

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