State Bank of India, the leader of the consortium that lent funds to grounded Jet Airways, on Friday said the relaxations, including waiver of open offer and assurance of flying slots, sought by Etihad Airways were “not considered feasible to negotiate” as the lenders did not have any authority to accommodate them.
“ln view of this, since a sustainable resolution plan could not be devised and two operational creditors have already approached NCLT, the member banks agreed in-principle, to approach NCLT, pursuant to the statutory right available to them under the lnsolvency & Bankruptcy Code, 2016,” the public sector bank said in an exchange filing. Etihad holds around 24 per cent stake in Jet.
“Subsequent to the closure of the bidding, as no binding bids were received, discussions were held with Etihad (EY) and other prospective investors to find a way for infusion of funds. Etihad had sought certain relaxations viz. waiver of open offer, assurance of flying slots etc,” it said.
“An application for Corporate lnsolvency Resolution Process (CIRP) has been filed with NCLT, Mumbar on June 17. The bank is only a lender to Jet Airways and is not involved in or responsible for the management of the affairs of the company. lt is the responsibility of Jet Airways being the listed entity to disclose required information under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” it said.
According to SBI, the bank being a lender, is not in a position to make any disclosures on behalf of Jet Airways. “We, State Bank of lndia, are not in a position to assess/ comment on the material impact. However, the lenders have undertaken the instant CIRP against the company in the normal course of business and to protect their interest.”
lt may be further noted that initiation of instant insolvency proceedings is just a step for resolution/ recovery under the statutory right available to the lenders,” SBI said. SBI said financial position of Jet Airways being weak, lenders were continuously trying for viable resolution for last one year on account of operational losses.
“ln this regard, reputed consultants, SBI Caps and McKinsey were roped in as process advisors/ advisors. lt was also decided to initiate a bidding process to bring in new investors. As part of the bid process, expression of interest (EOl) for investment in Jet Airways was sought from interested participants. Etihad, NllF, TPG Capital and lndigo Partners had expressed their interest. The bidding process closed on May 10, 2019,” it said.
NCLT on Thursday decided to admit the insolvency petition against Jet Airways filed by its creditors and appointed a Resolution Professional in an attempt to salvage their exposure of around Rs 8,500 crore. The insolvency process will allow lenders led by State Bank of India to sell the company as a whole or sell its assets and bring to an end weeks of uncertainty over the airline’s future.
The tribunal has also appointed Ashish Chhauchharia of Grant Thornton as the resolution professional (RP) for the airline that stopped operations on April 17. The tribunal directed the RP to try and finish the resolution process in three months even though the RBI norms allow six months for resolution.