Jet Airways lenders not giving up yet on debt resolution process

Forum Gandhi Mumbai | Updated on March 13, 2020

To seek 90 days more from NCLT to find a buyer

The Committee of Creditors (CoC) of Jet Airways has decided to ask for a 90-day extension to the corporate insolvency resolution process (CIRP). The 270-day deadline ends on March 15. A plea to extend the time period to find a buyer will be filed with the NCLT on March 18.

The CoC met on Thursday to discuss whether to liquidate the company after none of the interested players submitted a bid to acquire the debt-strapped airline before the deadline. According to a person in the know, “The CoC has in principle agreed for an extension of 90 days to the CIRP.”

However, the extension is subject to approval from the NCLT. According to the norms, the CIRP can be extended only up to 330 days. After the 180-day period had ended, NCLT had already given an extension of up to 270 days which will be over on March 15. The next hearing of the insolvency proceedings is on March 18.

Prudent ARC, Synergy Group and a consortium of the Russian government-backed Far East Development Fund, in partnership with Enso Group, had earlier submitted their Expression of Interest (EoI). But they did not submit a financial bid before the deadline expired on March 9.

According to the source, “All the potential bidders are still in the fray, but they have issues over both domestic and international slots of Jet Airways. It’s high time that the government gives clarity to them now.”

Coronavirus impact

Another possible option discussed during the CoC on Thursday was the liquidation of the airline’s assets. However, to add to the woes for the airline, the outbreak of coronavirus has impacted the markets really badly.

“Even if we were to liquidate the assets of the airline, given that the rupee has depreciated, and the markets are underperforming because of coronavirus, we will not get the correct value. The best option is to continue the process,” said a source.

Claims worth over ₹36,090 crore, against Jet Airways have been received so far, of which the RP has so far admitted claims worth around ₹14,640 crore.

At its peak, the airline had 22,000 employees, including 6,000 on contract. According to company sources, the company still has over 5,500 employees on its payroll.

Meanwhile, the Enforcement Directorate has detained former chairman and promoter of defunct Jet Airways, Naresh Goyal after long hours of questioning at its Ballard Estate office on March 4.

Published on March 12, 2020

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