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NCLT allows more time for grounded Jet Airways

Equity Right Jet Airways

NCLT allows more time for grounded Jet Airways

 The Mumbai bench of the National Company Law Tribunal (NCLT) has advised lenders of Jet Airways to take their decision on granting Expression of Interest (EoI) for the sale of the airline. The direction comes after the bankruptcy court was informed by a resolution professional of the airline that two more bidders are showing interest in reviving the grounded airline. While no information was let out as to who the two new bidders are.

Jet Airways on the path of revival

Jet Airway’s Committee of Creditors (CoC) is in favor of taking two new EoI’s besides Synergy Group to take over the airline. According to the resolution professional that is overseeing resolution for the airline, timing is essential for the revival of Jet Airways and as such the CoC is asking for more time from the Bankruptcy court.

Jet Airways, the airline founded by Naresh Goyal has been grounded since April 2017. This was the result, after the company failed to raise money to keep the airline running. The development surrounding Jet Airways comes after the Civil Aviation Ministry had earlier informed NCLT that they are willing to accept any resolution plans with complete business restructure coming through the tribunal. However, the airline cannot be a part of another airline company as it will be treated as a new company when it starts operating again. Jet Airways CoC is hopeful that the tribunal will extend the time period for a final decision on who will take over the airline.

The CoC have to work out on the two new bidders as they meet the necessary requirements before the committee submitted a final decision to NCLT. It is to be noted that any resolution plan should pass through  NCLT after which it will give permission for operation.

Synergy Group brings out it’s own plan of reviving the airline

Latin American investment firm Synergy Group has informed the court, it’s interest to take over the airline. However, the group was asking for more time before taking any decision as it is conducting its own investigation on Jet Airways. The group claims to have been successfully revived airline companies in the past. The firm informed the tribunal that the group is keen to restart operation of the Airline in the domestic market as well as in one of the world’s busiest airport in London’s Heathrow.

A representative from the Synergy Group stated that although Jet Airways is in urgent need of investment, the firm still has to work on several measures before making any commitments to investors. The representative added that the group had successfully revived grounded airlines in South America and wants to continue the same in India. Synergy had earlier submitted a draft proposal on taking over the airline, but a full resolution plan with the lenders is still not completed. After a hearing on the case requested by the CoC, NCLT has given an additional time period for the committee to work out on the two new bidders.

The tribunal informs the Synergy Group that the Government is keen on increasing ticket prices. It added that if the group decides to take over the airline its best to pay some upfront money so as to get more time before operating the airline. The resolution professional informed that the airline had received claims amounted close to Rs 30,000 crore from financial creditors and other parties. However, only one-third of the claims were accepted. The resolution professional has so far accepted an amount close to Rs 8500 crore from various financial creditors. Another Rs 15,000 crore of claims by other lenders are still under inspection.

NCLT allows more time for grounded Jet Airways

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