Wednesday, August 14, 2019

No takers, Jet Airways set to fly into liquidation

Jet Airways, one of the premium airlines in India which was grounded in April due to cash starvation, is now headed for liquidation in the bankruptcy court after it received no serious expressions of interest (EoIs) despite the banks extending the deadline to August 10.

Fresh capital of Rs 13,000 crore is required to keep Jet Airways up and running and no investor is willing to bet big on the airline's revival, two bankers told DNA on condition of anonymity. Banks are also not agreeable to providing additional debt to the sick airline, the sources said.

As reported first in DNA, the extension of the deadline to submit the EoIs was done at the behest of Etihad Airways, which holds a 24% stake in the airline. But the national carrier of United Arab Emirates did not submit any bid. "Etihad remained engaged in the process, but despite the endeavours of everyone involved, there remained very significant issues relating to Jet's previous liabilities. Regrettably, in these circumstances, it was neither feasible for nor responsible of Etihad to reinvest in Jet at this time," the airline said.
The rescue of the beleaguered airline now looks impossible.

"We received no EoI for Jet Airways which could be taken forward. Liquidation in NCLT seems to be the only way out. Etihad wanted Securities and Exchange Board of India exemption for an open offer, but they failed to get it," said a banker who is privy to the company's financial situation.

Lenders of Jet Airways will, however, keep the option of possible takers open till the end of the resolution period. On June 20, the Mumbai bench of the NCLT admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC) after lenders referred it to the bankruptcy court. NCLT has asked the banks to find a revival plan for Jet Airways in 170 days as against the normal practice of 270 days, considering that the salaries of the employees needed to be paid. Failing this, the airline would have to go for liquidation.
14/08/19 Manjuu AB/DNA

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