NCLT allows 90 more days to find out the revival plan for Jet Airways

The dedicated bankruptcy court has allowed the plea filed by the resolution professional (RP) of Jet Airways seeking an extension of 90 days for the corporate insolvency resolution process (CIRP). The RP had filed the plea last week for an extension after the lenders failed to get any viable revival plan for the grounded airline within the deadline. Currently, three parties including the Russian government-backed Far East Development Fund, have shown interest to bid for the revival of the grounded airline.

“The tribunal had accepted the RP’s plea for an extension of 90 days since the statutory time of 270 days got over on Monday (March 16),” said two people familiar with the development. “The RP argued that the committee of creditors (CoC) of Jet Airways had passed the resolution for the extension with over 70% voting. While, remaining lenders abstained, probably due to the Coronavirus advisory.”

on February 18 lenders of Jet Airways set a new deadline of March 10 for submission of bids for the grounded airline after South American conglomerate Synergy Group and New Delhi-based Prudent ARC failed to meet the deadline. However, the Synergy Group backed out of the bidding process over flight slot issues.

Interestingly, on March 7, Vishesh Chandiok, chief executive of Grant Thornton India tweeted that, “I’m sorry to report but I fear we are very near the end of the road for Jet Airways the proverbial ‘chicken or egg’ is what killed the airline. “My apologies to all the employees in particular that we Grant Thornton India couldn’t do better for you,” added Chandiok.

On Wednesday, Ashish Chhawchharia, the head of Grant Thornton India's restructuring practice and the RP for Jet Airways, was not immediately available for comment. “It's an additional life given to the CIRP process so that maximisation of the value of the assets can happen,” said Ashish Pyasi, associate partner, Dhir and Dhir Associates. “The assets owned by the company are of such nature that they may not get the same value in liquidation which these assets will get in resolution. In fact, some of the assets may become obsolete due to liquidation.”

The RP has received claims of about Rs 30,000 crore, less than a third of which is from financial creditors. He has accepted close to Rs 8,500 crore from financial institutions and is in the process of verifying claims worth another Rs 15,000 crore.