Jet Airways stake sale: Will grounded airline be left with just one bidder? Russian fund Treasury RA Creator may be disqualified, says report

  • Russian fund Treasury RA Creator did not provide enough information about itself to Jet Airways' insolvency resolution professional

  • This would be the third time that Jet Airways, which is undergoing insolvency proceedings, has failed to attract any new bidders

  • After the 10 August deadline, Synergy Group Corp reportedly evinced interest in the airline

The number of bidders for grounded airline Jet Airways is getting fewer and fewer. Now there is only one bidder in the race, as Russian fund Treasury RA Creator may be disqualified, according to  media reports.

Russian fund Treasury RA Creator did not provide enough information about itself to Jet Airways’ insolvency resolution professional nor did it deposit the mandatory amount required to seek access to the airline’s data, making it ineligible to bid, a person said to Mint on condition of anonymity.

Though a decision on disqualification is yet to take place, the Russian fund is as good as disqualified, the report said, leaving just South American conglomerate Synergy Group Corp in the race.

This would be the third time that  Jet Airways, which is undergoing insolvency proceedings, has failed to attract any new bidders during the extended deadline period for submission of initial bids.

After the 10 August deadline, Synergy Group Corp reportedly evinced interest in the airline.

The Synergy Group owns a majority in Colombian carrier Avianca Holdings, which has a codeshare partnership with Air India.

 Jet Airways stake sale: Will grounded airline be left with just one bidder? Russian fund Treasury RA Creator may be disqualified, says report

Keren Rodriguez, 6, daughter of a Jet Airways employee, holds a placard as she attends a protest by Jet Airways employees demanding to "save Jet Airways" on the occasion of May Day at the Chhatrapati Shivaji Maharaj International Airport in Mumbai. Reuters

Etihad Airways, which owns 24 percent stake in Jet Airways, did not submit any bid.

In June, Ashish Chhawchharia was appointed as the resolution professional to manage the affairs of Jet Airways, which shuttered operations in April.

The airline's assets include 14 aircraft including 10 Boeing planes—down from 124 before the grounding—and 49 per cent stake in Jet Privilege and a few buildings.

Its liabilities are over Rs 36,000 crore, including more than Rs 10,000 crore of vendor dues, Rs 8,500 crore along with interest owed to the lenders, over Rs 3,000 crore in salary dues and more than Rs 13,500 crore in accumulated losses of the past three years

The lenders also list spares, slots and routes as the assets of the Naresh Goyal-promoted airline which operated its last flight on 17 April 2019.

Bidders who wanted to own a slice of Jet Airways

There were a few unsolicited bidders. At the height of the Jet Airways crisis, James Unsworth, founder and CEO of Atmosphere Intercontinental Airlines, sent an unsolicited offer for the airline. He is the founder and CEO of  a yet-to-be-operational premium airline service, Atmosphere Intercontinental Airlines, which would establish a new premium airline group in four different countries, according to his Twitter profile.

AdiGro Aviation, a unit of the UK-based AdiGroup, had placed a binding bid for the cash-strapped Jet Airways. This was its second attempt. Its first attempt was rejected as the company was perceived to be part of a consortium which had Naresh Goyal, the ex-promoter of Jet Airways, as its member.

Ajay Harinath Singh’s Mumbai-based  Darwin Platform Group (DPG) was the third unsolicited bidder to stake a claim for the revival of the grounded airline.

A group of professionals, led by Florida-based college professor Sankaran P. Raghunathan, proposed a leveraged buy-out plan (LBO) to revive the grounded airline.

Etihad Airways was among four investors that submitted initial bids for the airline. The others were private equity firms TPG Capital and Indigo Partners and Indian wealth fund National Investment and Infrastructure Fund (NIIF).

Abu Dhabi-based Etihad Airways put its plan on hold to invest further in Jet Airways,

There were reports that the Hinduja Group was planning to initiate the bidding process as it reportedly received the approval of the major stakeholders of Jet Airways such as its founder Naresh Goyal and Etihad Airways. The lenders, however, did not receive a formal offer from the Hinduja Group.

In the second round of submission of Expression of Interests (EoIs), which closed on 10 August, the lenders received interest from energy baron Anil Agarwal's family trust-backed Volcan Investments, Russian Fund Treasury RA Partners and Panama-based Avantulo Group. However, Avantulo Group, could not make it to the final list of bidder companies as it failed to submit eligibility documents.

Volcan opted out of the race a day after publicly announcing its interest in Jet Airways.

With inputs from agencies

Updated Date: Sep 10, 2019 14:46:04 IST