Jet lenders to seek 90-day extension for resolution

The committee of creditors (COC) of Jet Airways on Thursday decided to file for an extension of the airline’s corporate insolvency resolution process (CIRP), given that a plan to revive the firm is still not on the table. None of the players in the fray, however, has backed out of the process completely.

An extension of up to 90 days may be sought from the National Company Law Tribunal (NCLT), sources said. It was also discussed in the meeting that perhaps this was not the right time to go for liquidation of the company, given weak sentiments prevailing in the economy because of the coronavirus outbreak.

Under the insolvency and bankruptcy code (IBC), the maximum time limit for the completion of CIRP has been set at 330 days, which includes the litigation period. The 270day CIRP period of the company ends on March 15.

Under the IBC provisions, Jet can get a 60-day extension from the bankruptcy tribunal. However, the NCLT will decide whether it will grant a 90-day extension to Jet, as no resolution plan has been submitted by any of the suitors. The grounded airline did not receive any proposal for revival until the last date of submission of resolution plan expired on March 9.

Sources said the three players — Russia-based Far East Development Fund, New Delhi-based Prudent ARC, and South America-based Synergy Group — are still in the fray, but issues related to slots are stumbling blocks that are preventing them from presenting a resolution plan. The Russian fund expressed interest in the airline’s revival last month, hoping to introduce Sukhoi Super Jet 100 in the Indian market. Its executives met the top functionaries of the government but were apparently nudged to consider investing in Air India. On the other hand, Prudent

ARC had sought additional time to raise funds from investors but failed to muster a plan, while Synergy Group turned cold as it had issues regarding airport slots in India and abroad. Besides slots, Synergy had reservations about the liabilities of the airline.

Sources also said there would not be a fresh call for bids for the firm. If anyone shows interest it will be taken up by the COC accordingly. This was the second time that the lenders called for a fresh resolution as the first round of bidding did not yield much response. The lenders gave ample time to the prospective suitors by extending the deadline repeatedly.

A few days ago, Vishesh C Chandiok, chief executive officer of Grant Thornton India, had tweeted that the airline had run out of options, as he feared it was end of the road for the airline. The total claim amount of the creditors is ~36,090 crore, of which ~14,640 crore was admitted as on October 20. Jet had shut its operations in April 2019 and was dragged to the insolvency court on June 20, 2019, by its lenders over dues.

Currently, the airline has 12 aircraft, including three Boeing 737s, six Boeing 777s, and three Airbus A330s, (including one leased to Air Serbia).

Jet had 20-30 per cent of available slots at Delhi and Mumbai airports and overseas traffic rights, but these had been allocated temporarily to other carriers. In December 2018, the airline had 115 planes but most of them have been repossessed by lessors.