Mumbai: Bankrupt carrier Jet Airways India Ltd., once the nation’s biggest by market value, faces fresh warning signs as a deadline to avoid liquidation looms. Creditors will likely be forced into extending a Feb. 17 deadline for the sale of the airline as the shortlisted bidders have yet to form bidding groups, according to people familiar with the matter. Time is tight as creditors may have to push the company into liquidation if there is no resolution by around mid March.
In a stunning fall, the Mumbai-based airline was forced to suspend operations last year after it fell victim to a cut-throat price war initiated by a slew of budget carriers. It has missed payments to banks, staff and lessors.
The two shortlisted bidders Synergy Group Corp. and Prudent ARC Ltd. had both submitted expressions of interest in January, but haven’t yet cobbled together bidding groups.. Synergy is seeking a local partner for its bid, while Prudent is looking to team up with a company with international aviation experience, the people said, asking not to be identified because the matter is private.
Short of a court judgment to the contrary, creditors are mandated by India’s nascent bankruptcy law to push Jet Airways into liquidation if the bankruptcy process extends beyond 270 days from its admission on June 20, 2019. The 270-day period for Jet Airways is set to expire around March 16, limiting the time within which the airline can be sold outside of a liquidation process.
A third bidder had also submitted an expression of interest, a precursor to bidding, but had been disqualified by lenders on the grounds that it did not meet the threshold bar set for potential bidders.
Ashish Chhawchharia, the court-appointed resolution professional overseeing the bankruptcy of the company, didn’t immediately respond to requests for comment.
Calls to the listed office phone number of German Efromovich, the founder of Synergy Group, went unanswered. A spokesman for Prudent ARC declined to comment. –Bloomberg