Logistics

Jet Airways: Prudent ARC inks non-disclosure agreement with resolution professional

Forum Gandhi Mumbai | Updated on February 01, 2020 Published on February 01, 2020

Prudent ARC, one of the potential bidders for Jet Airways, has signed a Non-Disclosure Agreement 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, the National Aviators’ Guild (NAG), on January 30. 

During the meeting, the RP laid out a road map 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 has invited Expressions of Interest (EoIs) from parties interested in a stake in Jet. Besides Prudent, South American conglomerate, the Synergy Group, is in the 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.

In the January 30 meeting, the RP 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, the NAG has called an ‘Emergency Open House’ on February 4.

Jet Airways had temporarily shut operations 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, the 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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