Prudent ARC seeks 4 more weeks to submit plan on Jet Airways resolution

The two suitors showing interest in the grounded Jet Airways failed to submit a resolution plan as the deadline for bid submission closed on Monday.

One of the suitors, New Delhi-based Prudent ARC, has sought additional four weeks’ time to submit a revival proposal for the airline, sources close to the development said. South America-based Synergy Group, the second player in contention, is yet to submit a plan. Sources said issues related to slots in the domestic and international routes were the bone of contention for Synergy Group. 

The committee of creditors of Jet is meeting on Tuesday to discuss the way forward.  

Prudent ARC is in talks with investors and has submitted letters of support from its investors. The resolution professional of Jet is seeking more clarity on the same and to ascertain that investors are not disqualified under rules from participating in the airline’s revival. Prudent ARC had earlier signed a non-disclosure agreement with the resolution professional of Jet. 

This is the second time that lenders called for a fresh resolution as the first round of bidding did not result in any resolution plan. The lenders gave ample time to prospective suitors by extending the deadline repeatedly. 

Earlier, Synergy Group had said slots at Heathrow airport are critical to the airline’s operations and they would decide on participating in the resolution only if they get clarity on slots. This time, it seems, Synergy Group has same the demands. Besides slots, Synergy has also made some reservations about the past liabilities of Jet. 

On its part, the civil aviation ministry had clarified that it would decide on returning domestic slots to Jet on submission of a concrete business plan. 

Currently, the airline has 12 aircraft, including three Boeing 737s, six Boeing 777s, and three Airbus A330s (including one leased to Air Serbia). Of them, the three Boeing 737s are fully-owned by the airline. There is a pending loan of around Rs 250 crore on the remaining planes. Banks have security interest over nine planes, which give them the right to acquire them in the event of a default. The remaining debt would have to be cleared before the airline gets full ownership.

Creditors' claims for the airline are of Rs 36,090 crore, of which Rs 14,640 crore was admitted as on October 20.

Jet had 20-30 per cent of available slots at Delhi and Mumbai airports and overseas traffic rights, but these have been allocated temporarily to other carriers. In December 2018, the airline had 115 planes, but most of them have been repossessed by lessors.