When Jet Airways suspended operations a year ago, its over 20,000 employees were hopeful that a way would be found and the airline would be back in the skies soon. However, less than three months later, a consortium of lenders led by State Bank of India chose to refer the airline to the National Company Law Tribunal after their attempts to find a new investor failed.

Jet employees’ hopes must have been lifted by the initial enthusiasm and the proposals that were received to revive Jet Airways. Anil Agarwal’s Volcan Investments, Russian Fund Treasury RA Partners, and the Panama-based investment firm Avantulo Group were among those that showed interest in Jet.

South American conglomerate, Synergy Group, which owns a stake in Avianca Airlines, too showed interest and the Russian government-backed Far East Development Fund, in partnership with Enso Group, Prudent ARC and Synergy Group, entered the fray.

There were other attempts too. A consortium of Jet’s minority shareholders and four unions — pilots, technicians, cabin crew and others — proposed converting the airline’s debt — both financial and operational creditors — into equity.

Sankaran Raghunathan, a minority shareholder who was leading the consortium, said they sent a notice to SBI Caps, which was appointed to evaluate a resolution plan for Jet, on April 25 last year to include their consortium in the process of resolving the Jet situation. SBI wanted to wait till May 10, the last date for others to submit their EoIs, before entertaining this proposal.

“We submitted our proposal by email; however, SBI did not respond to us and invite us to this process,” he added. As time progressed, each of the interested parties either withdrew or did not participate in the entire process of submitting a technical and financial bid on the basis of which the new owner of Jet Airways was to be decided.

Volcan withdrew from the race early on after submitting its EoI, saying its submission was only exploratory in nature.

Russian Fund Treasury RA Partners and Avantulo Group did not meet the qualification norms. Synergy Group too withdrew, maintaining that it needed clarity on Jet’s slots.

The lenders led by SBI also got feelers from Etihad Airways, which already owned a 24 per cent stake in Jet, the Tata Group, AdiGroup, the State-owned National Infrastructure and Investment Fund and private equity firms Indigo Partners and TPG. Reports even suggested that business tycoon MA Yussuf Ali was willing to acquire a stake in Jet. However, Etihad, the Hinduja Group and the Tata Group did not submit bids.

Too wide a gap to bridge

“In essence, Jet could only be revived if it was reset and rebooted with fresh capital, management, governance and mindset. However, lenders saw it as a going concern that needed fresh capital alone. The gap in understanding the turnaround of an airline was too wide to bridge,” Sanjay Viswanathan, Chairman, AdiGroup, told BusinessLine .

The government restarting the divestment of Air India, which gives potential investors a better and more viable investment opportunity, and the outbreak of the coronavirus, which is likely to see the global aviation industry post a loss of around $250 billion, could further jeopardise any attempts at reviving Jet.

In fact, lenders to Jet Airways are gearing up to liquidate the airline as they are losing all hope of finding a new owner in the backdrop of the massive stress in the global aviation sector due to the travel restrictions imposed across the globe following the Covid-19 epidemic.

While the lenders had taken 90 more days to find a buyer under the NCLT-led insolvency process before the epidemic broke out, banking sources maintain that it will now be impossible to get a bidder at a time when the aviation sector’s outlook is gloomy.

With inputs from K Ram Kumar

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