The situation has turned very grim for the beleaguered airline Jet airways. As per a Financial Express report, no proposals have been received to revive the carrier which is undergoing insolvency process.
To take the stock of situation and decide future course of action, the committee of creditors is scheduled to meet on Thursday (12 March). It should be noted that the deadline for submitting bids was last month revised to 10 March.
The Committee of Creditors, is likely to vote for liquidation of the airline in the absence of bidders.
The CEO of Grant Thornton India, the resolution professional overseeing the airline’s resolution, Vishesh C Chandiok said, “I fear we are very near the end of the road for Jet Airways – the proverbial ‘chicken or egg’ is what killed the airline.”
Jet airways, India’s second largest airline till 2018 with 13.8 per cent market share, was grounded on 18 April 2019 after running out of funds to carry out the operations.
After failing to secure acceptable offers, the airline had gone into insolvency on 20 June 2019 after NCLT’s Mumbai bench admitted an insolvency plea submitted by SBI representing a total of 26 lenders. The court had appointed Grant Thornton’s Ashish Chhawchharia as the resolution professional for the process.
The CoC has called for Expression of Interest (EoI) three times in the past year. The first round of bidding did not result in any resolution plan for the revival of the Jet Airways. The deadline was extended time and again to give ample time to prospective suitors.
In December last year, the NCLT extended the corporate insolvency resolution process (CIRP) of Jet Airways by 90 days as the 180 days deadline for CIRP period of the grounded airline had ended on 16 December.
In the second round, that ended on 15 January, South America-based Synergy Group and Delhi-based Prudent ARC were reported to submitted EoIs for the revival of ailing Jet Airways. However, they did not take things forward.
Earlier, Hinduja group too had explored the possibility of investing in the airline but backed out later as it found no value. The airline had also received early EoI from billionaire Anil Agarwal’s family trust Volcan Investment, which later pulled out.
Last month, the lenders commenced a third round of EoI after a Russian government-backed entity, Far East Development Fund, showed early interest in the airline at the last moment.
However, no formal plans were received till 9 March for revival as per the report of Financial Express. “No bids were received till the deadline. We will have to see what the CoC does now,” an official connected with the development was quoted as saying by FE.
The company’s dues to banks are around Rs 8,500 crore, while it owes another Rs 25,000 crore in arrears to lessors, employees and other firms.
Additionally, the founder-promoter of the airline, Naresh Goyal, is under scrutiny by various government agencies. Last week, the Enforcement Directorate (ED) on Wednesday (4 March) filed a fresh case of money laundering against Naresh Goyal.