Wednesday, September 30, 2020

Jet Airways insolvency: All eyes on banks as they begin voting on the two bids

 October 7. That is when the tenure of Rajnish Kumar as the Chairman of State Bank of India gets over. And that is why the date has come in play in the Jet Airways insolvency process even as lenders, sources say, meet on September 30 and start the voting process.

The moot question is: Will the airline get a new owner before Kumar completes his tenure and his successor Dinesh Kumar Khara takes over?

For that to happen, the SBI-led committee of creditors (CoC) will have to vote on the two bids presented by the two competing suitors - the consortium led by Flight Simulation Technique Centre (FSTC) and consisting of Big Charter and Imperial Capital, and the consortium led by Kalrock Capital and Murari Lal Jalan.

Sources told Moneycontrol that the voting, which will be online, could begin from September 30. "Normally it is a long-drawn process and can take up to two weeks," said a senior executive. Each lender has to individually evaluate the two proposals and then cast its vote.

While another senior executive close to the banks said the outgoing SBI Chairman could hasten the process, a long weekend - starting October 2 on Friday - could make it a challenge.

The voting happens after a yet another delay in the insolvency process. On September 28, when the CoC was to meet and banks would have possibly begun voting, a decision was taken to give the two sides an opportunity to revise their offers.

This happened after the FSTC-led consortium offered to improve its resolution plan. "The two sides have been given a few more days to resubmit their plans. They will be asked to make a presentation, and the voting will happen after that," a senior executive told Moneycontrol.

However, that led to the Kalrock-Jalan combine taking exception to the delay. In a strongly worded letter to the lenders on September 29, the consortium highlighted what it says is "total disregard to the timelines set for the final submission of the resolution plan".

The deadline for Jet Airways corporate insolvency resolution process, or CIRP, is October 21.

30/09/20 Prince Mathews Thomas/

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