Several bidders, no deal: A timeline of Jet Airways’ struggle to find a buyer
A year ago, today, an airline which was once India’s largest private airline suspended operations, and has since looked for a buyer, with nothing materialising so far. The airline announced temporary suspension of services on April 17 last year after it couldn’t raise any more money from its lenders. The last flight S2-3502 took off from Amritsar at around 10.30 pm touched down at Mumbai's Chhatrapati Shivaji International Airport at 12.22 am on April 18.
At the time, Jet had a debt of around Rs 8,500 crore on its books and has total liabilities of nearly Rs 25,000 crore.
Employees and creditors were left hanging and are still waiting for their dues. Payments were pending for months when the beleaguered airline collapsed under the weight of its debts and a cash crunch.
After Jet Airways shuttered with no money to fly last year, thousands of staff came together for public meetings, silent protests and made representations to the government and other authorities. Candlelight marches were also organised in various cities.
Jet Airways, which began its journey as an air taxi operator with service from Mumbai to Ahmedabad, had about 1,300 pilots and a total of about 20,000 employees at its peak. At the peak of its operations, Jet Airways had little over 120 planes. When the operations came to a halt due to mounting debt woes and unpaid salaries, the airline had around 16 own aircraft.
The airlines’ lenders led by State Bank of India, then took over in a bid to find a buyer for the company to make back their dues.
However, on June 10, 2019, two operational creditors, Shaman Wheels and Gaggar Enterprises took Jet Airways to National Company Law Tribunal (NCLT) and pleaded for bankruptcy proceedings. On June 20, 2019, the National Company Law Tribunal admitted the insolvency petition filed against Jet Airways.
While some entities expressed their interest in the airline, no concrete proposals have come up so far.
Here are all the developments that have happened in the last year:
Prior to the insolvency proceedings, a group of Gulf-based NRIs were looking to raise emergency funding to help Jet fly again. This included Saudi-based Gold Tower Group, Economic Trade Organisation President Asif Iqbal, Saudi-based Icon World and Sandalwood Director Aftab Khan and Aryan Hospitality and Aleef Aviation Chief Executive Mazhar Nawaz.
In May, the company’s employees stepped up, and senior executives representing a section of grounded Jet Airways employees met with SBI Caps officials to discuss an earlier proposal to take over management control of the airline and rope in outside investors to commit Rs 3,000 crore. This, too, did not materialise.
At this time, TPG Capital, Indigo Partners and National Investment and Infrastructure Fund (NIIF) were in the race to buy a stake in the grounded Jet Airways after they gave their expression of interest. At the last hour, Etihad Airways also joined the race.
Etihad was then to find an India partner to pick up a majority stake, as norms do not allow foreign entities to hold stakes more than 49%. The India partner was said to be the Hinduja group. Later, talks broke down between the two, and the partnership did not proceed.
Prior to this, efforts were also on for Etihad Airways to also get the airline, which already had a stake in Jet Airways, to pick up more by way of infusing funds. Initially Etihad had too many riders for infusing funds, but then submitted its EOI.
Bids in, bids out
British entrepreneur Jason Unsworth had also shown interest in picking up a stake in the airline. He is the CEO of Atmosphere Intercontinental Airlines, which is yet to start operations. In a tweet in February 2020, Unsworth said he bid for the airline four times.
In June, London-based AdiGroup showed interest in Jet Airways. The AdiGroup was an unsolicited bidder.
Vedanta Group’s Volcan Investments was another company that showed interest, but later backed out.
In June 2019, the committee of creditors (CoC) was given until August that year to find a buyer. While they received EoIs in June, by the time August rolled around, many either withdrew or conveyed their decision not to pursue.
A 180-day extension was then given in August.
A serious bidder
In September 2019, Jet got, what could be called its most serious bidder so far.
South African Synergy Group Corp expressed interest and said that it would be open to picking up a stake if lenders agreed to take a haircut, and convert their debt to equity. In January 2020, it submitted a bid for the airline, but to pick up a majority stake, it would require an Indian partner. Whether or not it had one is unclear.
No one apart from Synergy submitted a bid.
The same month, the NCLT approved the extension of the corporate insolvency process of Jet Airways by 90 days, expiring March 15.
In January this year, creditors were looking at liquidating assets, but were still hopeful of finding a buyer.
In February, Business Standard reported that the Far East Development Fund, set up by the State Corporation Bank for Development and Foreign Economic Affairs of Russia and headed by Russian President Vladimir Putin, was interested, and even roped in a local entity — the Enso Group.
New Delhi-based Prudent ARC also threw its hat in the ring.
Yet another extension
Last month, the CoC again sought a three-month extension on the deadline for the submission of bids. On March 18, the NCLT approved the request for extension by 90 days. This was notable because under the insolvency and bankruptcy code, the maximum time limit for completion of CIRP has been set at 330 days, which includes the litigation period, as per a recent amendment.
With the approval of the 90-day extension, Jet Airways gets 360 days for resolution.
The lookout for a buyer is still on and a final extension has been given, following which if nothing materialises, the airline’s assets will be liquidated. Making matters worse, the COVID-19 and the subsequent lockdown has crippled the aviation sector, crushing any further hope the airline could have had to find prospective buyers.
With agency inputs