Jet Airways bid: Prudent ARC signs non-disclosure agreement

Forum Gandhi Mumbai | Updated on February 01, 2020

Prudent ARC, one of the potential bidders for Jet Airways, has signed the non-disclosure agreement (NDA) with the Resolution Professional (RP). This is the first formal step to acquire a stake in the debt-strapped airline.

Meanwhile, BusinessLine was given to understand that the RP met with representatives of Jet Airways’ pilot body, National Aviators’ Guild (NAG) on January 30.

During the meeting, the RP laid out a roadmap and informed the representatives that Prudent had signed the NDA to acquire a stake in Jet.

Signing an NDA is mandatory for any company to get access to the data room. A data room essentially has all the important documents related to the company on the block, including contracts for aircraft, agreements with vendors, information relating to employees and other financial data. The company will be given some time to examine the books of the airline as part of the due diligence. Once the company completes the exercise, it will place a financial bid for acquiring the assets.

This is the second time that the RP had invited Expression of Interests (EoI) from parties interested in a stake in Jet. Besides Prudent, South American conglomerate Synergy Group is in race for a stake in the airline. Synergy was the only party which had submitted its (EoI) in the first round as well.

However, Synergy had a few reservations regarding the erstwhile slots of Jet Airways and its past liabilities.

Past liabilities

In the meeting that was held on January 30, the RP had also informed that Synergy was “raising questions of past liabilities of employees.”

According to a source, the RP has asked for suggestions and recommendations on options with respect to past liabilities and future aspects of contracts, as this will “help the RP negotiate better with the interested buyers.”

In this regard, NAG has called for an ‘Emergency Open House’ on February 4.

Jet Airways had temporarily shut operation in April. At its peak, the airline had 22,000 employees, including 6,000 contract employees. According to company sources, the company still has over 5,500 employees on its payroll.

As on October 20, total claims against Jet stood at ₹36,090 crore, of which the RP has so far admitted over ₹14,640 crore.

Published on February 01, 2020

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