Jet saga: Lenders make contingency plan in case of no bids

As the official bidding deadline for Jet Airways nears, its lenders are said to be preparing a contingency plan to allow ceratin parties, including a group of airline employees who have shown interest in taking over the airline, a chance to present their case.

According to banking industry sources, the step will not come into force until the passing of the official deadline of 6.00 p.m. on May 10.

"We have made it very clear since the start that May 10 is the deadline for the four selected entities to send in their binding bids," a senior official told IANS.

"Till the end of that deadline, no new option will be applied or any other entity allowed to bid. However, if no binding bids are received, then the unsolicited bids might be scrutinised."

Lenders of the airline led by state-run State Bank of India (SBI) are currently in the process of selling the airline to recover their dues of over Rs 8,400 crore.

Private equity firm TPG Capital, Indigo Partners, National Investment and Infrastructure Fund (NIIF) and Etihad Airways are in the race to buy a stake in the now grounded Jet Airways.

Another source told IANS that a travel and tour operators association has approached lenders with an offer to invest Rs 250 crore in the airline.

Besides the association, a section of Jet's employees and numerous domestic and international entrepreneurs have evinced interest in investing in the grounded airline.

"We can not stop unsolicited bids being sent. But these people should understand the bare basics of the airline business and that this type of a venture requires enormous financial resources," the official said.

Earlier this week, the pilots' union of Jet Airways approached the Supreme Court to direct the consortium of lenders to release funds required to restart operations.

Last month, Jet was forced to announce a temporary suspension of all flight services as it was unable to maintain even bare minimum operations.

Prior to temporarily suspending all flight services, Jet had already folded up most of its operations owing to the grounding of around 90 per cent of its fleet by lessors, as the consortium of lenders refused to extend loans to the airline.

(Rohit Vaid can be contacted at rohit.v@ians.in)

--IANS

rv/bc