Jet Airways' lenders to discuss Rs 10 crore interim funding, initial bids at Monday meeting

The third meeting of Jet Airways' Committee of Creditors (CoC) is scheduled to be held on Monday. The lenders, who hold a majority 51 per cent stake in the airline, are expected to consider the interim funding of Rs 10 crore that lead banker SBI has already approved as well as a new expression of interest (EoI) submitted by a foreign airline.

The airline's resolution professional (RP) Ashish Chhawchharia received an EoI from the overseas airline last week, well past the bid submission deadline of August 10, The Business Standard reported. "The new EoI will be verified and put up for consideration of the airline's CoCs," a source told the daily without divulging the name of the carrier. The RP had earlier received EoIs from Panama-based Avantulo Group and a Russian fund Treasury RA Creator. Industrialist Anil Agarwal-led Volcan Investments backed out shortly after submitting an EoI.

Meanwhile, the grounded airline's liabilities continue to mount. As per earlier claims, Jet Airways had liabilities of over Rs 26,000 crore. However, now its total liabilities have shot up to Rs 30,558 crore, reported the daily. Of the total claims, Resolution Professional Ashish Chhawcharia has admitted Rs 12,555 crore worth of claims and rejected claims worth over Rs 11,996 crore, the report added. These include Rs 10,224 crore (with interest) worth of lenders' dues; Rs 17,922 crore of operational creditors (excluding employees); Rs 545 crore of employees and workmen; Rs 789 crore of representatives of workmen and employees; and Rs 1,108 crore of other creditors.

The National Company Law Tribunal (NCLT) had told the RP to discuss the matter with the CoC so that interim funding could be arranged to pay off salaries to the employees.

While State Bank of India agreed to release its share of the interim funding, the other lenders are yet to take a call. The funds will reportedly be used for maintenance and preservation of aircraft, which have been grounded since April.

"While slots held by Jet have been temporarily given to other airlines, there is no firm assurance that these would be released in case of revival of Jet. The actions of the income tax and enforcement directorate against the airline's founder Naresh Goyal, too, are factors to deter potential buyers," an executive from a public sector lender told the daily, adding that the CoC nonetheless continues to support resolution efforts and has not discussed liquidation yet.

The CoC meet today is also expected to take up the matter of the insolvency proceedings against Jet Airways in the Netherlands, where it was declared bankrupt after failing to pay two European creditors. In April, H Esser Finance Company and Wallenborn Transport had filed a petition citing unpaid claims worth around Rs 280 crore.

The National Company Law Appellate Tribunal (NCLAT) last week asked lenders of Jet Airways whether they are ready to pay fees and bear the costs incurred by the Dutch court administrator. A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhyay asked the Committee of Creditors (CoC) of Jet Airways to file an affidavit within a week in this regard. The next hearing is scheduled for September 4.

With PTI inputs

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