Near the end of the road for Jet Airways, says Grant Thornton CEO

Forum Gandhi | | Updated on: Mar 08, 2020

Grant Thornton’s CEO, Vishesh C Chandiok, has tweeted that it is probably “near the end of the road” for the debt-strapped Jet Airways.

Jet Airways temporarily shut operations in April 2019 and was dragged to the insolvency court on June 20, 2019, by Jet’s lenders over unpaid dues.

The advisory firm's Ashish Chhawchharia was appointed as the Resolution Professional (RP) by Jet’s lenders.

On Saturday afternoon, Vishesh C Chandiok, Grant Thornton’s CEO in a tweet apologised to the grounded airline’s employees, “I’m sorry to report but I fear we are very near the end of the road for #JetAirways - the proverbial ‘chicken or egg’ is what killed the airline- my apologies to all the employees in particular that we @GrantThorntonIN couldn’t do better for you.”

A consortium of the Russian government-backed Far East Development Fund, in partnership with Enso Group, Prudent ARC and Synergy Group are in the fray to acquire a stake in Jet.

The RP and Chandiok remained unavailable to comment on the said tweet. A Grant Thornton employee close to the development said the process was still on and they were hopeful that a potential bidder would submit a resolution plan before the March 9 deadline.

A senior official on behalf of the lenders said: “We do not see a possible resolution plan from any bidders.”

BusinessLine had reported that while Synergy wanted clarity on Jet’s Heathrow slots from the Directorate-General of Civil Aviation (DGCA), the Indian authorities told the company to first place a bid.

According to a Grant Thornton employee, the reference to the ‘chicken or egg’ proverb in Chandiok’s tweet was to who would be the first mover, Synergy or the Indian government authorities.

Employees in a tizzy

Responding to Chandiok’s tweet, Jayanta Das, a twitter user said, “Thanks for ur update Sir. Going by the story I think @GrantThorntonIN dragged the episode too long when the proverbial egg-chicken story as u said was visible. One thing I should ask u - why using proverbs? Why can't we call a spade a spade? Suddenly how come everyone is so scared?

Another Jet employee, who has been leading an employee association of the airline in the NCLT process, requesting anonymity said, “If the rules can be mended for Air India. SBI can bail out Yes Bank but the government cannot even provide clarity on Jet’s slots or a little leeway for Jet Airways.”

State-run Air India has been going through a financial crisis as well. Prior to the Union Budget, a few reports had suggested that the Finance Minister would ease the Foreign Direct Investment (FDI) norms for investment in an Indian airline.

The Union Cabinet on March 7 had approved changes in FDI norms. Non-Resident Indians (NRIs) can now bid for 100 per cent shares owned by the government in national carrier Air India.

A long journey

This is the third round in which potential bidders have bid for a stake in Jet Airways.

In November last year, the Corporate Insolvency Resolution Process was extended by 90 days, after the 180-day deadline ended.

Synergy Group had emerged as the sole potential bidder for the airline. A representative on behalf of Synergy had informed the insolvency court that they were interested in Jet; however, Synergy needed clarity on Jet's slots and raised questions on the past liabilities of employees.

On account of a lack of clarity on the slots, Synergy did not submit a bid. Since there were two more interested parties , the RP requested a fresh round of Expressions of Interest (EoI) and an extension of the CIRP process till mid-March.

Published on March 08, 2020
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