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Etihad wants to participate in Jet Airways’ insolvency process

The Hinduja Group is understood to be in talks with Etihad to prepare a formal bid for Jet Airways.

By Mitali Salian

Etihad Airways has approached lenders on revival of Jet Airways, weeks after the National Company Law Tribunal (NCLT) approved the corporate insolvency resolution process (CIRP) against the now-defunct airline.

The Abu Dhabi-based airline is learnt to have expressed its intent to participate in Jet's resolution process, a source aware of the development said.

Meanwhile, lenders asked Etihad to look for a majority Indian partner and make a formal bid that will be finally vetted and approved by the NCLT.

The Hinduja Group is understood to be in talks with Etihad to prepare a formal bid for Jet Airways.

Sources aware of the developments further denied lenders have received any offer from the Tatas yet on purchasing assets of Jet after the airline went to NCLT.

Media reports have suggested that the Tata Group has plans to bid for some assets after the grounded airline was admitted for bankruptcy resolution.

NCLT on 20 June admitted State Bank of India's plea to initiate insolvency proceedings against Jet, and sources suggest the committee of creditors (CoC) is expected to be constituted by July 16.

At the CoC's first meeting, lenders are expected to review the first status report on Jet submitted by the RP on July 5 along with the issue of inviting fresh expressions of interest for the airline.

According to sources, by way of assets the airline has six aircraft, of which one is parked at the Schiphol airport of Amsterdam and has been seized by foreign operational creditors.

Additionally, the US Exim Bank had extended a line of credit on these, of which Rs 80 crore remains outstanding after encashment of some guarantees.

Sources also indicated there are spare aircraft parts worth Rs 1,000 crore among the assets. However, lenders remain uncertain about how to monetise them,
they added.

Jet Airways halted operations on 17 April after lenders refused to provide emergency funding.

The airline has dues of around Rs 8,000 crore with financial creditors alone. In its insolvency plea, SBI stated that the airline has outstanding working capital worth over Rs 460 crore with the bank.

Passing the order, the Mumbai Bench of NCLT had asked that the matter be resolved within 90 days as Jet Airways insolvency is a matter of "national
importance".

The 90-day deadline was left out of the official order.