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Jet Airways crisis: HDFC to auction cash-strapped airline's BKC Mumbai office space over Rs 415 cr loan default

HDFC, one of the lenders to the now-grounded Jet Airways, has decided to auction prime office space owned by the airline in Mumbai's Bandra Kurla Complex (BKC) after Jet Airways failed to pay back a loan of Rs 414.80 crore, a media report said.

According to Mint, the office space that is part of Jet Airways Godrej BKC, a 12-storey premium commercial building, will be auctioned on 15 May at a base price of Rs 245 crore.

The Times of India quoted HDFC saying the property was mortgaged to it by Jet Airways and it was now enforcing the mortgage. In 2008, Jet Airways won a Rs 826-crore bid during an MMRDA auction to develop the BKC plot. Later in 2011, Jet Airways entered into a pact with Godrej to jointly develop the land.

In 2015, Godrej Properties sold 4.35 lakh sq ft in Godrej BKC for Rs 1,479 crore to the pharmaceutical firm, Abbott India Ltd.

 Jet Airways crisis: HDFC to auction cash-strapped airlines BKC Mumbai office space over Rs 415 cr loan default

Representational image. Reuters

Jet Airways had on 17 April suspended all domestic and international flights after failing to secure emergency funds from its lenders.

The embattled airline said it took the decision to ground all aircraft after the State Bank of India on behalf of the consortium of Indian lenders conveyed that they were unable to consider its request for critical interim funding.

Recently, two senior finance ministry officials said the government sees little hope of a bidder emerging for debt-laden Jet Airways Ltd.

Parties that had initially expressed interest in Jet, which is saddled with roughly $1.2 billion of debt, have failed to come forward with firm bids to bail it out, increasing odds that it could soon face bankruptcy proceedings.

“There is little scope in the revival of Jet,” said one official, adding that if a bidder emerged, the government was still willing to restore slots to the private airline that had been temporarily given to rivals.

The second official said it was only a matter of time before someone dragged the carrier to the National Company Law Tribunal - India’s bankruptcy court - for recovery of dues.

Last week, The Economic Times, citing sources, reported that three of the four qualified bidders - Etihad Airways, TPG Capital and Indigo Partners - had not signed the non-disclosure agreements necessary for conducting due diligence.

The civil aviation regulator had said that lessors already requested the return of more than half of Jet’s fleet of about 115 aircraft, with the carrier voluntarily returning some of those.

With agency inputs

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Updated Date: May 08, 2019 14:55:49 IST