Jet Airways' lenders agree to provide interim finance plan for the bankrupt carrier
SBI Caps, the investment banking arm of State Bank of India (SBI), had earlier led an unsuccessful sale process for the airline before it was dragged to bankruptcy court.
Lenders of bankrupt Jet Airways agreed on Friday to extend some interim financing to help it cover legal and other costs as resolution experts look to find a potential buyer, said a Reuters report, adding that bankruptcy resolution firm Grant Thornton, in a regulatory filing, said that Jet's lenders had also approved the eligibility criteria for potential buyers.
However, the filing did not say how much interim funding had been approved, but a source familiar with the matter told Reuters the lenders had agreed to provide $10 million. The committee of creditors (CoC), via an electronic voting process, has also agreed to appoint SBI Caps to help with the whole resolution process. SBI Caps, the investment banking arm of State Bank of India (SBI), had earlier led an unsuccessful sale process for the airline before it was dragged to bankruptcy court.
Grant Thornton planned to open bidding for the airline on Saturday, the source told Reuters, adding that the only criterion for bidders will be having a net worth of 10 billion Indian rupees ($145 million). This is similar to the parameter used when lenders initially tried to sell the airline. Bidding is likely to be open for 15 days and may be extended if there are no suitors, the source added. Last month, Jet`s creditors, led by SBI, took the airline to bankruptcy court after failing to agree on a revival plan.
Meanwhile, the government has recently promised to facilitate employment to job-less airline staff. The Civil Aviation Ministry is in touch with other private airlines, including SpiceJet and IndiGo, to assist Jet staff get meaningful employment, said Civil Aviation Minister Hardeep Singh Puri on Tuesday, adding that a website would be launched listing staff of Jet Airways to help them find employment in other private entities.
The Civil Aviation Minister said, "We are also producing a website which is ready. I wish I had the capacity of telling you that the website is up. Every employee would be listed there and the prospects for their re-employment or employment will be facilitated by the government," while replying to Members in the Rajya Sabha on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019.
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He, however, said that government can not assume responsibility for a business failure conducted by a private party. Referring to defunct Jet Airways, Puri said he was sensitive to (business) failure and willing to see what can be done within the governmental system to cushion that failure.
Notably, the cash strapped-Jet Airways had suspended its entire operations on April 17, and the government re-allocated its slots and foreign traffic rights to rival carriers. Prior to suspension of its operation, the airline had nearly 20,000 staff on its rolls.