What was the objective behind this resolution plan?
We wanted to sell it as a going concern rather than as a dead company. The National Company Law Tribunal was never an option for Jet Airways.
It is a different case. The entire value of the company would have eroded. This deal is beneficial for the company, for the sector, and for the lenders at large. It will take close to a month and a half. We will have binding bids by April 30. Lenders are hopeful it will be a successful deal, and one that will create value.
holding 25 per cent may be a deal-breaker for potential buyers who may not be comfortable to partner him.
We will provide clean slate to any potential investor. There is a binding agreement with existing shareholders — Naresh Goyal
and Etihad Airways — that they will not come in the way of any new investment. Goyal has agreed to cap his investment at a certain minimal level if a new investor makes the demand. Ditto for Etihad; it will sell its entire stake if a new investor wants it. Our plan is ready and the new investor has to whet it. If any modification is sought, it will be done and given the value for debt. The meal is ready to be served. A new investor can demand salt and masala to taste.
Will the banks place any reserve price on the stake?
There is no reserve price. It will be a competitive bidding process. The bidder will tell us at how much it will settle the secured debt of the lenders. The one demanding the least haircut from us will get it.
How will banks manage the airline for the time being? It’s a difficult business and needs professional oversight, so that there is no more value erosion.
We will give our name for the chairman of the board by today. We are talking to private sector banks as well. We have recommend a former SBI chairman who has a lot of experience in restructuring and private sector lenders will nominate one name. One independent director from the management committee will be there, supported by a chief executive officer, a chief financial officer, and other executives in the management. There will be no role change. If they need any support in terms of external expertise, that will be provided.
Will banks oversee the entire sale process?
Yes. SBICAPS will lead the talks from the lenders side. Jet Airways
has also appointed investment bankers to find a potential buyer.