Jet Airways: Consortium bidders to submit individual solvency certificates

Irving Hamilton
April 13, 2019

In a clarification to its April 8 invitation for EoI on change in control and management of Jet Airways, the lenders gave interested parties an option to restructure the airline's existing debt facilities, put at over Rs 8,000 crore, and infuse funds through loans.

Jet's lenders, led by State Bank of India (SBI), have been seeking a new investor to take a stake of up to 75 percent in the airline. "Accordingly, to allow better participation, the domestic lenders have agreed for extension of the timeline for submission of EoI". Any interested parties will then have until April 30 to make a formal bid. Shares of Jet Airways were down 1.6% at Rs 263 by close of Wednesday's trade on the BSE.

As airfares continue to rise, Indian aviation watchdog DGCA has "requested" the airlines to bring the "immediate and medium-term plan" on Wednesday to augment the number of flights, which will be over and above the flights approved for the summer schedule, government officials said on Tuesday.

To be certain that genuine parties are bidding, SBI Caps, the merchant banker undertaking the task, said all members of the consortium have to provide their details, which then have to be certified by their managing director or chief executive director. "A Jet Airways flight has been stopped from taking off by a European cargo company at Amsterdam (Schiphol Airport) due to outstanding bills", a Jet Airways source told ANI.

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The airline has had to ground more than three-fourths of its fleet due to non-payment of lessors' rentals and is operating with just 25 planes out of its original 123.

Further fund infusion into the airline also hangs in the balance, as the lenders will decide whether to pump in more capital based on their assessment of response to the EoI.

Meanwhile, the airline is struggling to carry out day-to-day operations as it faces an acute cash crunch to pay for fuel, vendors and lessors. Goyal owns around 51% in the airline but has pledged 31.2% with lenders.

The banks have appointed SBI Capital Markets to assist them in the formulation of a resolution plan, which includes undertaking a competitive bidding process. "Jet Airways regrets the inconvenience to its guest".

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