Days after the deadline to submit the EoI (expression of interest) ended, Jet Airways' resolution professional Ashish Chhawchharia is hoping for the best. "There's hope that they [creditors] will get a good resolution plan but we will get to know that once they start interacting and reviewing documents. Today, we have to believe that there's a good chance," says Chhawchharia in an interaction with Business Today.
Chhawchharia said that they will issue a final list of eligible applicants in the next few days. According to the EoI document released on July 20, there will be a nine-stage process before applicants submit the resolution plan with all relevant documents to the resolution professional. The deadline to submit interest in Jet was extended twice due to weak response in the first two rounds.
Three entities have expressed interest. That includes Russian Fund Treasury RA Partners, Panama-based investment firm Avantulo Group and South American conglomerate Synergy Group Corp. Synergy owns a majority stake in Colombian carrier Avianca Holdings that has a codeshare agreement with Air India.
In the second round of EoI submission that ended August 10, metals and energy tycoon Anil Agarwal's family trust-backed Volcan Investments was interested but backed out a day later. "The lenders wanted to increase the deadline after Volcan withdrew. There was only one party left after Volcan pulled out, and we wanted to have more people in the process," says Chhawchharia.
After repeatedly failing to secure bidders over the past few months, it seems Jet's committee of creditors are not in a hurry this time. This is despite the National Company Law Tribunal (NCLT) asking for the resolution process to be wrapped up in 90 days against the mandated 180 days.
"It's a large organisation. They [suitors] will take some time to understand and study the details. We should allow them the time, otherwise if we squeeze time, they will not be able to assess it, and then they will not submit the bids," says Chhawchharia. Jet was admitted to the Insolvency and Bankruptcy Code (IBC) proceedings in June after creditors referred the airline to NCLT.
The airline stopped operations on April 17 after it ran out of funds. Before that, Jet was gradually scaling down operations by reducing the number of aircraft in service. It has over Rs 30,000 crore of dues which are claimed by a long list of financial and operational creditors. In July, this number stood at Rs 24,887 crore, out of which Rs 1,380 crore worth of dues were rejected by the resolution professional.
Earlier, a consortium of employees tied up with London-based AdiGroup to acquire 75 per cent stake in the airline but that consortium didn't go anywhere. Etihad Airways, which owns 24 per cent stake in Jet Airways, did not submit any bid. Industry experts are not hopeful of the resolution process. "The lack of serious bidders raises doubts on the entire process. There are strong chances that Jet might go for liquidation eventually. I believe the proposal from the employee-led consortium was more structured than the ones in hand currently," says a former Jet employee.
The biggest pull for suitors is the airline's premium slots at domestic and international airports which have been temporarily given to rivals like SpiceJet, IndiGo and Vistara. Most of Jet's aircraft - over 100 - are already being taken back by lessors, and the 16-odd planes owned by the carrier are under cloud over non-payment of dues.