Potential bidders for Jet Airways Ltd have so far failed to show any firm interest in bailing out the struggling airline, a source involved in the matter said, increasing the likelihood that the company will face bankruptcy proceedings.
Jet, once India's largest private airline, was forced to stop all flight operations on April 17 after its lenders declined to extend more funds to keep the carrier going.
"Companies that had submitted initial expressions of interest are not following up with binding bids," said the source.
A second source involved in the process said bidders had until May 10 to come up with binding offers, a few days later than the April 30 date indicated by lead lender State Bank of India (SBI) last month.
Both sources, speaking on Thursday, declined to be identified because the talks are not public.
Jet, saddled with roughly $1.2 billion of bank debt, and SBI did not respond to emails seeking comment.
The Indian civil aviation regulator has said that lessors have already requested the return of more than half of Jet's fleet of about 115 aircraft, with the carrier voluntarily returning some of those.
Jet's shares closed down 12 percent, having earlier fallen more than 20 percent to their lowest in a decade.
Closer to bankruptcy court
Employees of the company have said they have not been paid for months and plan to take the airline to India's bankruptcy court (NCLT), a process allowed under Indian law.
"Right now we're more worried about the bidding deadline," said a Jet Airways pilot. "We will obviously have to take it to NCLT and (go through) with the proceedings," he added.
As funds ran out, Jet also struggled to pay vendors and employees.
"In the last four or five months, payments became highly erratic," Vispi Patel, an executive at Weizmann Forex, which counts Jet as a client, said.
Patel said Jet had failed to respond to its calls and emails and as a result the FX company had reclaimed money from some forex cards issued to pilots and cabin crew for international trips.
Sources told Reuters that Jet's lenders had not yet made a decision on whether to push for bankruptcy, but industry experts said dragging the airline through the NCLT might be counter productive.
"If there are no bidders through this process, then the airline will shut," analyst Vijayant Gupta of Edelweiss Securities said. "Lenders have no incentive to take Jet to the bankruptcy court because there are no hard assets to liquidate." The Economic Times reported that Jet's management has met executives from Mahindra, Adani, Tata group and Reliance Industries in the last two weeks regarding a rescue, but none of the conglomerates have responded positively.
Those companies either did not respond to emails seeking comments, or declined to.