Lessors apply to DGCA to de-register 13 more Jet aircraft

Roman Schwartz
April 12, 2019

Due to cash crunch, the airline has been paying only part salaries to its over 16,000 employees which forced a section of its pilots on Tuesday to send a legal notice to the management, which is now being headed by the lenders led by the State Bank of India.

Industry experts say that Jet's valuation would have dropped in recent weeks given that lessors have deregistered some of the grounded planes and the Director General of Civil Aviation has handed over some of the landing slots to rivals after the airline cancelled a large number of flights.

The banks, led by the State Bank of India (SBI), also said that the bidders in a consortium must furnish individual solvency certificates. However, the lenders have extended the Wednesday deadline by two days, in the hope that Etihad Airways, which hasn't submitted an EoI, will show interest. "The action came following the airline breaching its bank guarantee limits with the company", an Indian Oil Corporation official said.

Subsequently, the airline's CEO Vinay Dube said the company continues to work with lenders on the balance sheet restructuring plan and will inform the employees about the progress of the process by early next week.

As per the "clarification to bidders" document issued by investment banking major SBI Capital Markets (SBI Cap), the last date for EoI submission has been extended from Wednesday 6 p.m.to April 12, 6 p.m.

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"The qualified bidders will be expected to submit their respective binding bid (s) latest by April 30, 2019 subject to the terms set out under the bid document", SBI Capital Markets said in a notice posted on its website.

In the case of consortium, each member has to submit solvency certificate, which is a proof of an entity's financial stability.

A European cargo services provider seized one of Jet's planes at Amsterdam's Schiphol airport for non-payment of dues, leaving hundreds of passengers stranded. Fly Aircraft Holdings Nineteen Ltd, Wells Fargo Trust Company, CIT Group Finance, Fly Aircraft Holdings Seventeen Ltd, and Jade Aviation are amongst the few companies that have approached the regulator.

The airline has confirmed the cancellation of the said flight attributing to "operational reasons".

Jet Airways has debt of Rs 7,654 crore as of December 31, 2018.

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