Jet Airways crisis: Lenders to discuss bids, interim funding today

Jet Airways lenders will meet on Monday to consider an expression of interest (EoI) from an overseas airline and release of interim funds to the airline.

In the earlier meetings, the committee of creditors (CoC) had agreed to release $10 million in interim funds and had approved criteria for evaluation of bids for the revival of the grounded airline.

The airline’s resolution professional Ashish Chhawchharia received an EoI from the overseas airline last week well past the bid submission deadline. 

The last date for the submission of EoI was August 10. The new EoI will be verified and put up for consideration of the airline’s CoCs, a source said without divulging the name of the carrier. The resolution professional had earlier received EoIs from Panama-based Avantulo Group and a Russian fund Treasury Creator. Industrialist Anil Agarwal’s family trust Volcan Investments backed out after submitting interest. 

While State Bank of India agreed to release its share, other lenders are yet to take a call. The funds are to be used for maintenance and preservation of aircraft, which have been on ground since April. The resolution professional sought the National Company Law Tribunal intervention in the matter in a hearing last Friday.

“While slots held by Jet have been temporarily given to other airlines, there is no firm assurance that these would be released in case of revival of Jet. The actions of the income tax and enforcement directorate against the airline’s founder Naresh Goyal, too, are factors to deter potential buyers,” an executive from a public sector lender said. 

“So far, the lenders have not discussed liquidation and continue to support resolution efforts,” the source added.

Lenders will also discuss issue related to the ongoing insolvency process in the Netherlands.

Last week, the National Company Law Appellate Tribunal (NCLAT) asked the CoC of Jet if they would coordinate with a Dutch court-appointed administrator and accord foreign lenders, who were also pursuing insolvency proceedings against the debt-laden airline.

A three-member, Bench led by Chairperson Justice S J Mukhopadhaya, had asked the lenders to file an affidavit within a week detailing whether they would also pay the fees and costs of the Dutch court-appointed administrator. The case will be next heard on September 4.

Apart from India, Jet is also facing insolvency proceedings in the Netherlands, which is a regional hub for the European operations of the airline. Jet was declared bankrupt in the Netherlands in response to a complaint filed by two European creditors, H Esser Finance Company and Wallenborn Transport, who had claimed unpaid dues worth Rs 280 crore.  

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