The revival of grounded Jet Airways seems to be over with the debt-laden airline's strategic partner Etihad Airways reportedly moving out of the resolution plan, said a media report.
With all the efforts by State Bank of India-led lenders' consortium to take the airline into the sky again having failed, liquidation is reportedly the next step to recover the dues and committee of creditors (CoC) for Jet Airways may meet this week to decide the course of action, said a report in the Financial Express.
The decision of Abu Dhabi-based Etihad Airways to exit from the resolution plan of the crisis-hit airline has reportedly hastened Jet Airways' liquidation process as a section of the lenders finds this is the way out to recover up to 10 percent of the outstanding debt, the report said.
“Lenders will most likely go for liquidation. The CoC will have to agree on a final decision, but they are unlikely to invite expression of interests (EoIs) again,” the report said quoting a banking official.
Last week, it was reported that the financial results for the June quarter of Jet Airways were not finalised and the process was taking time due to the "complexities of issues" being faced by the airline.
The affairs of Jet Airways, which closed down its operations on 17 April this year, are now being managed by resolution professional Ashish Chhawchharia under the insolvency law.
On 13 August, Etihad Airways had said that it would not express interest in reinvesting in Jet Airways because of unresolved issues concerning the cash-strapped airline's liabilities.
Grounded Jet Airways had invited prospective bidders to express interest and last week, it had extended the deadline to 10 August.
Etihad Airways had acquired a 24 percent stake in Jet Airways in 2013, at a time when Jet Airways needed significant financial support, but since then the Abu Dhabi-based airline has been seeking "advanced solutions" to help resolve issues facing Jet Airways, it said.
On 12 August, the lenders of Jet Airways suffered the second major setback in their bid to revive the grounded Jet Airways by selling it out when billionaire businessman Anil Agarwal had said he was no longer interested to pursue the deal. The Vedanta chief announced his withdrawal from the stake buy of Jet Airways a day after he evinced interest in the airline.
On 11 August, Volcan Investment, Agarwal's investment company, said it had submitted the expression of interest (EoI) on 10 August—the last day of the extended bidding process—in an exploratory manner to buy stake in the airline that stopped flying mid-April and since June under bankruptcy proceeding.
With this, only two financial investors were left in the fray. Already deep-pocketed players like Etihad, which is already an equity partner in the airline and also the Hindujas had backed out of the sale process.
The lenders had extended the last date for submission of EoIs till 10 August from 3 August after failing to get any response by the first deadline. They had faced a similar situation in April when though four parties, including Etihad and TPG Partners, submitted EoIs, none moved ahead.
In March this year, Jet Airways founder Naresh Goyal and his wife Anita had quit the airline under a debt resolution plan.
An SBI-led consortium of 26 banks has informed the resolution professionals that Jet Airways owes them about Rs 8,5000 crore, added the banker. Apart from this, it also owes over Rs 400 crore to about 22,000 employees in unpaid salaries.
— With PTI inputs
Updated Date: Aug 20, 2019 14:01:59 IST