Jet Airways extends gain after CoC nod for revival plan; up 47% in 8 days

 

Shares of Jet Airways (India) hit the upper circuit of 5 per cent at Rs 42.15 on the BSE on Monday, after the committee of creditors (CoC) of the company approved the resolution plan of consortium of Kalrock Capital–Murari Lal Jalan.

The stock was trading higher for the eight straight day and has rallied 47 per cent as compared to 2 per cent decline in the S&P BSE Sensex during this period. Till 11:19 am, a combined around 24,000 shares changed hands and there were pending buy orders for 2.28 million shares on the BSE and NSE.

The Kalrock Capital-Murari Lal Jalan consortium has proposed to re-launch Jet Airways as a full-service carrier, with an initial investment of Rs 1,000 crore. It has initiated discussions with lessors and international airlines for contracts and partnerships. READ ABOUT IT HERE

“The e-voting concluded today, i.e October 17,2020 and the resolution plan submitted by Murari Lal Jalan and Florian Fritsch has been duly approved by the CoC under section 30 (4) of the code as the successful resolution plan”, the resolution professional said in an exchange notification.

The resolution professional of Jet Airways will now have to get the plan approved by the National Company Law Tribunal (NCLT). Upon receiving the NCLT approval, they would need to apply to civil aviation ministry and corporate affairs ministry for their approvals, respectively.

According to a Business Standard report, claims made by financial creditors, operational creditors, and employees have ballooned to over Rs 40,000 crore, out of which claims to the tune of Rs 15,525 crore has been admitted by the resolution professional. Financial creditors such as State Bank of India, Yes Bank, and others have claimed Rs 11,344 crore but only Rs 7,459. 80 crore has been admitted. It is expected that lenders will take a fairly large haircut on their exposure. CLICK HERE TO READ FULL REPORT

CoC approves Kalrock Capital-Murari Jalan's plan to revive Jet Airways

 

Eighteen months after it shut down and sixteen months after it became the first airline company to be admitted under insolvency and bankruptcy code (IBC), Jet Airways is finally all set to make a comeback, albeit with a new owner – Kalrock Capital and Murari Lal Jalan.

The resolution plan of consortium of Kalrock Capital–Murari Lal Jalan has been approved by the committee of creditors as e-voting of the lenders concluded on Saturday. “The e-voting concluded today, i.e October 17,2020 and the resolution plan submitted by Murari Lal Jalan and Florian Fritsch has been duly approved by the CoC under section 30 (4) of the code as the successful resolution plan”, the resolution professional said in an exchange notification.

Sources said, the plan submitted by Kalrock consortium won by an overwhelming majority.

ALSO READ: 'Legitimate businessman' Murari Lal Jalan's journey from paper to planes

As the committee of creditors have voted for Kalrock Capital led consortium to revive the airline, with a majority, the resolution professional of Jet Airways will now have to get the plan approved by the National Company Law Tribunal (NCLT). Upon receiving the NCLT approval, they would need to apply to civil aviation ministry and corporate affairs ministry for their approvals, respectively.

Jet Airways slots at major airports and its traffic rights were awarded temporarily to other airlines. Its operating permit is dormant and would need to be made active and licences of pilots and engineers would need to be renewed. “The whole investment is contingent to the airline receiving these approvals and plan could still stumble," said a person familiar with the matter.

A civil ministry official said that slots and rights will not be an issue. "Slots and rights will go back to pool and reallocated according to size and demand of airline. There are no problems with slots," said a senior ministry official.

Claims made by financial creditors, operational creditors, and employees have ballooned to over Rs 40,000 crore, out of which claims to the tune of Rs 15,525 crore has been admitted by the resolution professional. Financial creditors such as State Bank of India, Yes Bank, and others have claimed Rs 11,344 crore but only Rs 7,459. 80 crore has been admitted.

It is expected that lenders will take a fairly large haircut on their exposure.

While globally aviation companies have suffered due to Covid-19, it has also presented opportunities for new investors. “A new airline would be able to negotiate better rates with aircraft manufacturers and suppliers. Lease rates have declined. Pilot availability too has eased and many could be ready to join at lower packages,” said an aviation consultant K G Vishwanath.

Also in India the incumbent airlines are much weaker now and running high losses due to fall in passenger traffic. With only two airlines (Air India and Vistara) offering a business class service, there could be opportunity to grab the market share in premium traffic. It is not however clear how the new owners would like to position the airline.

Still the new owners would need to make a significant investment to kick start the airline.

Kalrock Capital was founded by European entrepreneur Florian Fritsch. According to his website, Fritsch began his career as a paramedic in Red Cross and set up his first company at age of sixteen. Over the last two decades he has invested in electro mobility, real estate, and renewable energy. This included investment in Tesla in 2008.

Kalrock is a financial advisory and asset management company focusing on real estate, venture capital and special situations. The firm has partnered with Dubai based businessman Murari Lal Jalan who has investments in diverse sectors like real estate, mining, trading, FMCG across various countries like UAE, India, Russia and Uzbekistan.

The Kalrock-Jalan combine was pitted against Imperial Capital-FSTC consortium which is also setting up another airline in India called Fly Big. The startup airline has been awarded routes under government's regional connectivity scheme (Udan) and hopes to start operations on Udan and non Udan routes from next month. Initially Fly Big aims to have a fleet of six ATR aircraft.

Jet Airways operated its last flight between Amritsar-Mumbai on April 17, 2019, as lenders turned down its demand for emergency funding. It has been under insolvency since June 2019.

Jet Airways RP files plea seeking 90 days extension for bids from NCLT

Jet Airways' resolution professional on Friday filed an application in National Company Law Tribunal (NCLT) seeking 90 days extension for the corporate insolvency resolution process of the defunct carrier.

On Thursday, the lenders to Jet Airways decided to seek an extension after it failed to attract any potential bidder.

The tribunal, comprising Bhaskara Pantula Mohan and Rajesh Sharma, will hear the matter next week.

The committee of creditors (CoC) had on February 18 set the new deadline of March 10 for submission of bids for the grounded airline after South American conglomerate Synergy Group and New Delhi-based Prudent ARC failed to meet the deadline.

According to sources, Synergy Group had backed out of the bidding process over the slot issues.

The March 10 deadline was set after Russia's Far East Asia Development Fund evinced interest in Jet Airways. Against this backdrop, the CoC extended the deadline for submission of bids to March 10.

The cash-strapped airline, which was grounded in April 2019, owes more than Rs 8,000 crore to banks, with those from the public sector having significant exposure.

NCLT on June 20, 2019, had admitted the insolvency petition filed by the lenders' consortium led by State Bank of India against Jet Airways.

The tribunal also appointed Ashish Chhauchharia of Grant Thornton as the resolution professional for the crippled airline.

Domestic air passenger traffic grows by just 3.74% in 2019: DGCA

Domestic air traffic slipped to low-single digit growth for the first time since 2015, largely due to the closure of Jet Airways.

The country saw double-digit growth only in November because of drop in fares, and saw a decline in April as Jet stopped operations. Though there is an increase in seat capacity on a year-on-year basis, the growth is marginal. Grounding of Boeing 737Max aircraft and ongoing issues with AirbusA320Neo engines, too, has slowed down capacity growth. Last January, the combined fleet of all airlines was 614 aircraft and that has now increased to 646.

“November (2019) witnessed maximum growth of 11.20 per cent. However, the numbers hit a low again dipping to 2.56 per cent in peak holiday season in December. It has been a difficult year for the aviation industry. However, we are hopeful that growth should rebound in the coming financial year after the spate of measures taken by the government,” said Saujanya Shrivastava, chief business officer (Flights & Growth), MakeMyTrip.

Bankrupt Jet Airways plans to sell Netherlands biz to Dutch airline KLM

Bankrupt Indian airline Jet Airways Ltd said it had entered into a deal with Dutch airline KLM that could lead to a sale of its assets in the Netherlands.

If the deal is finalised, it will only involve a sale of part of the company's business activities and not impact the shareholding pattern, Jet said in a statement dated Jan. 16.

KLM is a part of Air France KLM.

Jet Airways hits upper circuit on report Hinduja Group may bid for airline

Shares of Jet Airways were locked in the upper circuit limit of 5 per cent at Rs 29.6 on the BSE on Tuesday amid reports that Hinduja Group is preparing a bid to buy the grounded carrier.

The UK-based group, run by brothers Gopichand Hinduja and Ashok Hinduja, plans to submit an expression of interest by the January 15 deadline, signaling its intent to make a formal offer, Bloomberg reported quoting unnamed sources. Hinduja is seeking a partner to bid, the report added. READ MORE

The Group had considered bidding for Jet Airways in partnership with Etihad, but the latter jettisoned the proposal pushing the temporarily de-funct airline into bankruptcy. Jet Airways stopped flying in April after it ran out of money for daily operations.

Last week, Jet Airways had informed the exchanges that the had Committee of Creditors (CoC) passed the resolution to issue fresh invitation of Expression of Interest.

As per reports, Gopichand Hinduja had earlier said that the group was open to buying Jet Airways "if indemnified from the airline’s legal liabilities".

With today’s gain, the market price of Jet Airways surged 61 per cent from level of Rs 18.40 on December 11, as the creditors of the shuttered airline decided to seek fresh initial bids for the airline. The seventh meeting of CoC of Jet Airways (India) is scheduled to be held on January 02, 2020. The stock hit a high of Rs 31.10 on Monday in intra-day trade.

A combined 185,809 equity shares changed hands and there were pending buy orders for 70,866 shares on the NSE and BSE at 10:42 am.

Jet Airways hits upper circuit for 7th straight day, nears 3-month high

Shares of Jet Airways (India) were locked in 5 per cent upper circuit for the seventh straight day at Rs 28.25 on the BSE on Thursday as the creditors of the shuttered airline decided to seek fresh initial bids for the airline. The stock is trading at its highest level since September 30, 2019.

The Committee of Creditors (CoC) would seek fresh Expression of Interest (EoI), according to a regulatory filing on Monday.

“The 6th CoC meeting of Jet Airways (India) was held on December 17, 2019 and the CoC passed the resolution to issue fresh invitation of Expression of Interest for the corporate debtor in the e-voting concluded on December 22, 2019,” the resolution professional for the bankrupt company said in a regulatory filing on Monday.

Earlier this month, the National Company Law Tribunal (NCLT) had directed the CoC to expedite their decision on seeking fresh EoIs in view of new interest being shown for the grounded airline, the Press Trust of India (PTI) reported.

Jet Airways stopped flying in April after it ran out of money for daily operations. The airline is undergoing resolution process under the Insolvency and Bankruptcy Code (IBC).

In the past 10 trading days, the airline's stock has rallied 54 per cent from the level of Rs 18.39 on December 11, as compared to 2.5 per cent rise in the benchmark S&P BSE Sensex. It hsa zoomed 87 per cent from its all-time low price of Rs 15.10, touched on October 22, 2019.

Till 12:02 pm, a combined 36,764 equity shares had changed hands and there were pending buy orders for 198,027 shares on the NSE and BSE, exchange data shows.

Jet Airways is trading under ‘Z’ group category which includes companies which have failed to comply with its listing requirements and/or have failed to resolve investor complaints. The trades in these scrips executed in 'Z' group will be settled on trade-for-trade basis. Under the trade-for-trade segment, no speculative trading is allowed and delivery of shares and payment of consideration amount are mandatory.

Jet creditors seek 90-day extension in insolvency resolution process

The committee of creditors (CoC) of the beleaguered Jet Airways has decided to file an application before the National Company Law Tribunal (NCLT) for extending the corporate insolvency resolution process (CIRP) of the company by 90 days.

Under the Insolvency and Bankruptcy Code (IBC), the CIRP period can be extended by 90 days from the stipulated 180 days if there is a chance of resolution of the firm. The 180-day timeline of Jet ends on December 16.

In a filing to the stock exchanges, the company said lenders in the fifth CoC meeting passed resolutions to extend the last day for submission of a resolution plan by the South America-based Synergy Group to December 16 and filed an application in the NCLT to extend the CIRP period. Synergy Group was earlier given time till November 15 to file a resolution plan but it asked for more time to submit bid for the company, as it sought more clarity on airport slots in India and London.

Synergy Group is the only interested entity shortlisted by the Resolution Professional's team to file a plan for the defunct airlines.

In its last hearing in the NCLT, the tribunal asked Synergy Group to appear before the Bench and wanted to know if the firm was at all serious about reviving the defunct airlines.

The tribunal also made the Ministry of Civil Aviation and the Directorate General of Civil Aviation a party in the matter and sought their response on the availability of slots.

Synergy group gets a month to submit resolution plan for Jet Airways

Lenders to Jet Airways have agreed to give the Synergy Group time till December 16 to submit a resolution plan to revive the grounded airline.

The proposal was discussed at the committee of creditors meeting in Mumbai on Tuesday and will be put to vote for a formal approval in the next few days. The Insolvency and Bankruptcy Code (IBC) requires completion of a resolution process within 180 days.

The code also provides for further extension. Jet Airways came under insolvency proceedings in June and the airline’s resolution professional Ashish Chhawchharia will make an application to the insolvency court seeking a 90-day extension in the resolution timeline. South America’s Synergy Group is the sole contender to revive the grounded airline.

It had been given time till November 15 to submit its bid. However, the group sought more time as it seeks clarity on airport slots in India and London.

The group has been in regular touch with the resolution professional and the airline management, giving hopes of a revival. The Mumbai Bench of the National Company Law Tribunal (NCLT) has sought an interaction with the Synergy Group by December 3 to understand its interest in restarting Jet.

Jet Airways, Naresh Goyal under SFIO lens; stock hits lower circuit

Shares of Jet Airways were locked in the lower circuit band of 5 per cent at Rs 22.2 on the BSE on Monday after reports suggested founder Naresh Goyal was under Serious Fraud Investigation Office's (SFIO) lens for siphoning off funds. In comparison, the S&P BSE Sensex trading 0.16 per cent lower.

According to a Business Standard report, The probe agency has found that the company’s vast network of sales agents across the globe was not independent of Jet Airways and several of these entities were linked to its founder, Naresh Goyal.

“The money has been shown as outgoing payments to these agents but in many cases it was just a front for the company itself… There are many irregularities under investigation,” a person close to the matter said. READ REPORT HERE.

The debt-laden airline suspended operations on April 18, 2019 for want of funds. It was then declared bankrupt and has been looking for resolution since June. The grounded Jet Airways owes over Rs 8,000 crore to its lenders. Besides the lenders, the airline is estimated to have a total liability of about Rs 25,000 crore which includes dues of operational creditors.

Revival seems unlikely because Grant Thornton, the resolution professional appointed to run the bankruptcy process, has been unable to get a serious bidder to take over the company. Sources said banks were mulling liquidation and discussions on this had started.

The share price had continuously fallen from Rs 265 levels in April 2019 to Rs 15.45 on October 18, 2019, post which it has been hitting the upper circuit on a regular basis. The stock has gained 45 per cent at the bourses since October 18, primarily on announcement that the company shall be the first to undergo insolvency proceedings under the Cross Border Insolvency Protocol included under the Insolvency and Bankruptcy Code (IBC).

Former Jet Airways CEO Vinay Dube joins GoAir in advisory role

Former Jet Airways chief executive Vinay Dube has joined budget carrier GoAir in an advisory role, a source said on Saturday.

Dube had quit defunct Jet Airways on May 14, nearly a month after the airline ceased operations due to severe liquidity crisis.

According to the source, GoAir wanted to hire him for the position of the CEO, which is lying vacant since March this year.

"However, since there is a look-out notice against him from the Ministry of Corporate Affairs in Jet Airways case, it (the decision) would have got in legal tangle. Therefore, he has joined GoAir in an advisory role," the source told PTI.

Dube boarded the Wadia group-promoted carrier last week, the source added.

A response is waited on the query sent by PTI on the development.

Lookout circulars were issued against former Jet Airways chairman and then promoter Naresh Goyal and Dube, among others, in late May for alleged financial irregularities at the airline.

The circular is issued against a person directing the immigration authorities to ensure that he or she does not leave India through an airport or seaport.

NCLAT allows Dutch court administrator to attend Jet Airways CoC meetings

The National Company Law Appellate Tribunal (NCLAT) has allowed the Dutch court administrator of Jet Airways to attend the Committee of Creditors (CoC) meetings of the debt-ridden carrier. A three member NCLAT bench said that the Dutch administrator would be part of the CoC meeting and would be given minutes of the meetings.

The Appellate Tribunal also set aide the earlier order of the Mumbai bench of the National Company Law Tribunal (NCLT), which had denied to recognise the Dutch insolvency proceedings. NCLT had barred Dutch Court Administrator from taking part in the Jet Airways insolvency proceedings in India.

The Appellate Tribunal order came after the Resolution Professional of Jet Airways and Dutch Court Administrator agreed to co-ordinate in the insolvency proceedings ongoing in India. Earlier, during the last hearing, NCLAT had directed the Resolution Professional of Jet Airways and Dutch court to file the terms and conditions of their agreement.

NCLAT's direction came while hearing a petition filed by the Dutch Court Administrator against the order of the Mumbai bench of NCLT, which had declared overseas bankruptcy proceedings null and void.

Earlier, on September 20, during the last hearing, NCLAT had asked the Resolution Professional of Jet Airways to cooperate with the Dutch Court Administrator, which is also conducting insolvency proceedings against the debt-ridden carrier. Jet Airways is facing insolvency proceedings in the Netherlands and was declared bankrupt in response to a complaint filed by two European creditors.

In April, H Esser Finance Company and Wallenborn Transport had filed a petition citing unpaid claims worth around Rs 280 crore. Following this, a trustee in charge was appointed by the Dutch court and it had approached its Indian counterpart for access to the financial as well as assets of the airline. One of the Jet Airways aircraft, parked in the Schiphol Airport in Amsterdam, has already been seized.

The grounded airline owes more than Rs 8,500 crore to lenders. It also has a large debt by way of accumulated losses to the tune of Rs 13,000 crore, vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore. The consortium of lenders is led by SBI.

Enforcement Directorate grills Naresh Goyal over diversion of Jet funds

The Enforcement Directorate (ED) on Friday questioned Jet Airways founder Naresh Goyal for alleged diversion of funds to shell companies and irregularities in aircraft lease transactions under the Foreign Exchange Management Act (FEMA).

The action was part of a separate investigation launched a month back against Goyal and his associates, who helped in facilitating and executing illicit transactions overseas in alleged violation of foreign investment rules, said an ED official.

The enforcement agency is probing Goyal’s offshore investments which were made through diversion of funds from Jet Airways to 19 shell companies allegedly managed by him.

Apart from shell companies, the federal agency has come across several aircraft lease transactions from Ireland where the amount of lease paid was substantially higher than what is paid in the aviation industry.

During the search operation, the agency seized documents and digital records along with emails. ED had last month conducted search operation at Goyal’s 12 business and residential premises. “We have sought some papers from him (Goyal) and asked him to be present again next week,"said an official.

The role of Hasmukh Deepchand Gardi and his substantial investment in Tail Winds Corporation is also under lens.

Gardi, Goyal’s business partner, was named in Panama Paper global leaks for allegedly holding fraudulent companies.

Goyal incorporated Tail Winds on the Isle of Man in 1992, one year before he founded Jet Airways. It was alleged that Tail Winds was controlling the financial activities of cash strapped Jet Airways since 1993.

There’s another case against Jet and Goyal for alleged violation of foreign exchange regulations during the signing of a $150-million (over Rs 900 crore) deal with its strategic partner Etihad Airways in 2014 for a loyalty programme business.

In 2014, Etihad had picked up a 50.1 per cent stake in Jet’s frequent flyer programme - Jet Privilege - with the balance going to Jet.

The Income-Tax department and Serious Fraud Investigation Office (SFIO) too, are probing cases related to Jet Airways and Goyal.

Jet fails to find new suitor, further deadline extension for EoI unlikely

The decision of Jet Airways’ lenders to extend the deadline for submission of expression of interest (EoI) did not pay any dividend as the grounded airline failed to attract any new bidder till August 31, said a source familiar with the development.

The lenders had extended the date of submission of EoI till August 31 with the hope of getting more EoIs for the airline. Now, Jet’s resolution professional (RP), Ashish Chhawchharia, will evaluate the three EoIs he has received so far and furnish the list of eligible investors.

It is highly unlikely that the lenders and the RP will extend the deadline again, sources said.

Panama-based Avantulo Group and Russian Fund Treasury RA Creator were the first ones to submit EoI for Jet followed by an exploratory EoI by billionaire Anil Agarwal family trust Volcan Investment. However, Volcan opted out of the race. South America-based Synergy Group Corp was the third one to submit an EoI.

The airline’s RP is in talks with the new suitor, which has shown genuine interest in the defunct airline, said people in the know. The Synergy Group is eyeing a 49 per cent in the defunct airline and will also discuss co-investment options with the lenders and other infrastructure companies, the group’s advisor had said. “We intend to structure the acquisition as a foreign company with 49 per cent stake. Jet is publicly listed and we hope lenders would be willing to convert their debt into equity. We will also discuss partnerships with Indian infrastructure companies. We have several options,” said Antonio Guizzetti, president of consultancy G&A, which is advising the Synergy Group regarding the stake buy.

He said the amount of investment by the Synergy Group will depend on discussions and negotiations with banks and other creditors.

The RP has so far received claims of Rs 30,558 crore from financial creditors, operational creditors, and employees. In the revised claims data put out by the RP, of the total claims of Rs 30,558 crore, RP has accepted claims of Rs 12,555 crore and rejected claims worth Rs 11,995 crore with Rs 6,055 crore worth of claims still under verification. So far, Jet has received 18,596 claims, of which 13,911 have been admitted.

The airline came under insolvency on June 20 as lenders after months of negotiation failed to find any suitor. It had stopped flying on April 17.

Jet Airways crisis: Lenders extend expression of interest deadline again

Jet Airways lenders on Monday decided to extend the deadline for submission of the expression of interest (EoI) to August 31.

South America-based Synergy Group Corp had expressed interest in Jet last week and now the deadline has been extended to give another opportunity to a potential investor. The airline’s resolution professional is in talks with the new suitor, which has shown genuine interest in the defunct airline, said people in the know.

Earlier this year, the Synergy group also expressed interest in Italian carrier Alitalia. It is also expected that a few more EoIs may come in for Jet Airways within the extended deadline.

So far, the resolution professional had received EoIs from Panama-based Avantulo Group and a Russian fund called Treasury Creator. Anil Agarwal had also expressed interest in the airline and submitted an exploratory EoI for Jet but later pulled out of the race. However, only the Russian fund has been shortlisted so far, said sources.

Synergy Group Corp, founded by businessman German Efromovich, owns the majority stake in Avianca Airlines. Efromovich purchased Avianca, which went through bankruptcy in 2004, and has since turned around the carrier into South America’s second-largest airline. Avianca operates a fleet of 180 aircraft and serves over a hundred destinations in 28 countries with main operations in Colombia, Ecuador, and Peru, among other countries.

However, both the airline and its largest share owner are facing a crisis this year. The airline’s Brazilian unit ceased operations following a bankruptcy.

Efromovich, too, had to step down as the airline’s chairman following a loan default. The loan was taken by the Synergy Group by pledging its stake in Avianca as collateral.

“We do not have any information regarding the transaction you mentioned nor can we make any statements on behalf of any of our shareholders,” Avianca Airlines said in an emailed response.

The lenders on Monday decided to release the initial interim funding of $10 million for maintenance of Jet.

However, an application may still be filed in the National Company Law Tribunal asking the tribunal to direct the lenders to release funds. More funds have been sought from the lenders for recovery of the aircraft engines stuck in a maintenance unit over unpaid dues.

The lenders have given in-principal nod for the extra sum but will have to approve it through a vote this week.

The dispute with Luckystar, the owner of Jet’s HQs, has been settled. However, some issue with regard to the deposit money still needs to be sorted out. No settlement has been reached with HDFC with regard to an office space in Bandra-Kurla Complex, which was mortgaged for a loan of Rs 400 crore. Jet came under insolvency on June 20 despite the banks making efforts to find a suitor. It stopped flying on April 17. So far, Jet has received 18,596 claims, of which 13,911 have been admitted.

Anil Agarwal changes his mind, says won't invest in Jet Airways

A day after publicly announcing its interest in grounded Jet Airways,mining baron Anil Agarwal Monday said he is no longer interested in pursuing the same.

On Sunday, Agarwal's investment company Volcan Investment, had submitted an expression of interest in buying Jet Airways.

But Monday in a statement Agarwal said, "the EoI for Jet Airways by Volcan was exploratory in nature. On further evaluation and considering other priorities, we intend to not pursue this further."

It had submitted an EoI for Jet as it wanted to understand the business scenario for the company and the industry, the statement added.

The move leaves just two unnamed financial investors in the fray for the limited assets of the airline which stopped flying mid-April and is currently facing insolvency proceedings.

Lenders unwilling to provide extra funds to grounded Jet Airways

Lenders have expressed their inability to provide further capital to pay one month’s salary of Jet Airways employees following a recommendation from the National Company Law Tribunal (NCLT).

A proposal was submitted by the resolution professional to the committee of creditors in its second meeting on Thursday. The committee took a sympathetic view of the request but is unwilling to provide further capital, a source said.

An amount of Rs 90 crore was sought to pay salary to around 8,000 Jet employees. In the first meeting, lenders had agreed to release around Rs 70 crore to the airline for asset preservation purposes but the amount is yet to be processed. Jet was referred to the bankruptcy court on June 20 by State Bank of India after bankers failed to find any takers despite months of negotiations.

Jet stopped flying on April 17. The deadline for submitting expressions of interest for Jet ends on August 3. However, sources said the resolution professional had not got any bids for the airline so far.

The deadline for submission of bids may be extended beyond August 3 if no bids are received within the period.

Jet crisis: SBI moves intervention plea against HDFC claim on BKC property

State Bank of India, the lead lender to the bankrupt Jet Airways, Wednesday moved an intervention application against mortgage lender HDFC's plea claiming rights over a portion of the airline's BKC property.

The National Company Law of Tribunal (NCLT) adjourned the matter for August 8.

On July 4, the mortgage lender HDFC had moved the NCLT seeking to keep the airline's BKC property out of the bankruptcy process saying three floors of the BKC property are mortgaged with it as collateral for over Rs 400 crore loan.

Meanwhile, the tribunal approved Ashish Chhawchharia of Grant Thornton as the resolution professional for Jet Airways which stopped flying since April 17.

Chhawchharia, who got 81 percent votes of the committee of creditors, was the interim RP since June 20, when the airline was admitted for insolvency.

The liabilities and debt of the airline are over Rs 36,000 crore.

On July 18, the RP had said he received claims worth Rs 24,887 crore in 16,643 claims, including Rs 8,462 crore by financial creditors, against the company as of July 4.

Significantly, he rejected a claim of Rs 229 crore from JetAir, the privately held company of founder Naresh Goyal, which was the general sales agent of Jet Airways and the holding company the Goyals's stake in the airline.

The lenders, who control 50 percent ownership of the airline, after failing to get a buyer, was forced to sent it for bankruptcy on June 17, and on the 20th of the month the Mumbai NCLT admitted the plea.

Last Saturday, the lenders in renewed bid to sell the remaining assets invited expression of interest from interested parties with a deadline of August 3.

Financial creditors, who also include banks, have made 37 claims worth Rs 10,231 crore as of July 4, he said. The list of financial creditors, whose claims have been admitted include 14 domestic banks and financial institutions, 12 foreign banks and eight lessors, the RP said.

State Bank has made a claim of Rs 1,644 crore, including cash credit inclusive of interest, term loans and bank guarantees issued but not invoked, it said, adding its claims worth Rs 19 crore were rejected. Private sector lender Yes Bank has claimed Rs 1,084 crore, followed by PNB's Rs 963 crore and IDBI Bank's Rs 594 crore.

Operational creditors excluding workmen and employees have made a claim of Rs 12,372 crore, with the entire amount being under verification, while the workmen and employees have made a claim of Rs 443 crore which is also under verification, Chhawchharia said.

Apart from this, authorised representatives of workmen and employees have made 11,965 claims of Rs 735 crore, he said, adding other creditors, including other financial creditors and operational creditors, have made 121 claims amounting to Rs 1,105 crore.

Jet Airways interim RP receives claims worth Rs 24,000 cr from lenders

The interim resolution professional (IRP) handling Jet Airways insolvency has received claims of more than Rs 24,000 crore from its lenders, vendors, travel agents, and employees. The IRP has admitted 33 claims from banks worth Rs 8,462 crore, and is verifying Rs 15,044-crore claims from operational creditors and staff.

Naresh Goyal-owned group companies, including the airline's general sales agents in India, the UK, the UAE and a car rental firm, are among those who have filed the claims. Jet Privilege (Jet's loyalty programme), Etihad Airways, and its group companies have filed the claims, too. The IRP has rejected Rs 230-crore debt claim from Jetair (India general sales agent) and is verifying its Rs 87-crore claim as an operational creditor. The UAE-based general sales agent has claimed Rs 426 crore.

Only claims related to Jet are being considered and those of subsidiary JetLite will not be accepted, IRP Ashish Chhawchharia said in a notification on Thursday. “The corporate insolvency process of only Jet has been initiated, the wholly owned subsidiaries being a separate legal entity is outside the purview of the process and hence only the claims pertaining to Jet shall be considered,” he said.

Jet shut operations on April 17. Last month, its lenders decided to refer it to the insolvency court with the hope of finding a buyer. The National Company Law Tribunal has asked the IRP to complete the process in 90 days.

Creditor claims are being received as part of the insolvency process. Claims worth Rs 8,462 crore of domestic and overseas lenders have been admitted, while claims of Rs 1,380 crore rejected.

Lenders are voting this week to decide who can bid for the airline as they don’t want any frivolous players in the race, the committee of creditors (CoC) discussed in its first meeting on Tuesday.

E-voting should be over by Friday and advertisements inviting expressions of interest for Jet are scheduled to be out by July 20, said sources who attended the meeting. The suitors will get time till the first week of August to submit EOIs.

The CoC has finalised the voting rights of each lender based on amount owed. State Bank of India has 19.43 per cent votes, highest among all lenders followed by YES Bank (12.81) and Punjab National Bank (11.31).

In the first CoC meeting, the lenders took stock of the assets of the company, which include six planes, spare parts, slots, Jet Privilege shares, and other intangible assets. Interestingly, the plane confiscated by Dutch authorities is being treated as an asset. Sources said the team working for the IRP, Grant Thornton, had been engaging with the aviation ministry and the Directorate General of Civil Aviation regarding the slots that had been given away to other airlines temporarily. The interim RP has admitted the claims of the financial creditors worth Rs 8,500 crore.

Govt to launch portal to help Jet Airways staff find jobs in other airlines

The government may not have extended support to now-defunct Jet Airways, but it has promised to facilitate employment to job-less airline staff.

The Civil Aviation Ministry is in touch with other private airlines such as SpiceJet and IndiGo to assist Jet staff get meaningful employment.

Civil Aviation Minister Hardeep Singh Puri on Tuesday said that a website would be launched listing staff of Jet Airways and help find employment in other private entities.

"We are also producing a website which is ready. I wish I had the capacity of telling you that the website is up. Every employee would be listed there and the prospects for their re-employment or employment will be facilitated by the government," Puri said while replying to Members in the Rajya Sabha on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019.

The Minister, however, said that government can not assume responsibility for a business failure conducted by a private party.

Referring to Jet Airways, Puri said he was sensitive to (business) failure and willing to see what can be done within the governmental system to cushion that failure.

"But to suggest that a private sector entity goes belly up and the government has to take the responsibility I don't think that is correct," the Minister said.

Run out of cash, Jet Airways had suspended its entire operations on April 17. Subsequently, the government re-allocated its slots and foreign traffic rights to rival carriers. Lenders to the airline led by State Bank of India (SBI) have initiated bankruptcy proceedings against it after all attempts to rope in a buyer failed.

Before the airline suspended its operation, it had nearly 20,000 staff on its rolls. Several hundreds of them are learnt to have joined other carriers.

Replying to Members on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, he also countered a comment that airfares had gone up.