Housing Development and Finance Corporation (HDFC) has put on sale Jet Airways 52,775-sq ft office space on the fourth floor of Jet Airways Godrej BKC in Mumbai at a reserve price of Rs 245 crore. The sale process was initiated after the now-grounded airline failed to repay Rs 415 crore of dues, in addition to interest and other charges, owed to the mortgage financier.
In these circumstances, notice is hereby given to the public in general and in particular to the borrower that the below described Immovable Property mortgaged to HDFC Limited, the physical possession of which has been taken by the receiver appointed by HDFC Limited on April 16, 2019, will be sold by HDFC Limited in enforcement of the mortgage created in its favour, on an as is where is basis , as is what is basis , whatever there is basis and without recourse basis by way of public auction, on May 15, 2019, for realisation of HDFC Limited’s dues together with further interest, additional interest and rests along with liquidated damages, costs, charges, etc, HDFC said in the notice.
Jet Airways, which first defaulted on its repayment commitments on December 31, 2018, has turned into one of the largest stressed assets plaguing the banking system at the moment. The airline owes its lenders around Rs 8,500 crore and had to shut down operations after banks failed to arrive at a consensus on extending fresh funding to keep it afloat.
Bankers are now awaiting binding offers from potential acquirers for the airline, who have not been forthcoming so far. The deadline for sending in binding offers is Friday. In April, eight parties had put in bids for Jet. Apart from Jet s 24% equity partner Etihad Airways, other major parties to have put in bids were US-based private equity firms TPG and Indigo Partners, which had bid separately, and Think Equity Partner and Redcliffe Capital, who had put in a joint bid.
Banks have already begun to make provisions against their exposure to Jet. Yes Bank told analysts after its March quarter results that it has recognised the account of an airline company exposure as a non-performing asset (NPA) even though it was standard on March 31, 2019. ICICI Bank told analysts that its exposure to Jet is not meaningful and has been appropriately provided for.