Jet Airways: Consortium Bidders To Submit Individual Solvency Certificates

NEW DELHI —  Bidders in a consortium that bids for acquiring stake in cash-strapped Jet Airways have to furnish individual solvency certificates, according to SBI Capital Markets. “While all soft copies of the EOIs (Expressions of Interest) are required to be submitted by the EOI due date, the hard copies may be submitted by April 14, 2019,” it said in a set of clarifications issued regarding the bid document.

According to the EOI document issued on Monday, April 10 is the last date for submission of initial bids. Jet Airways is grappling with acute financial crunch and the SBI-led consortium of domestic lenders are implementing a debt resolution plan. SBI Capital Markets has invited bids on behalf of the lenders.

“Bidders are required to provide the solvency certificate … on their letterhead and certified by Managing Director/ Full Time Director / Chief Executive Officer of the bidder or a person holding an equivalent position in the bidder,” it noted. In the case of consortium, each member has to submit solvency certificate, which is a proof of an entity’s financial stability.

As part of the debt resolution plan for the full service carrier, the lenders are looking to restructure “existing facilities and infusion of funds by way of loans or acquisition/ subscription of up to 75 per cent of equity share capital of the company”. Shares of Jet Airways declined 1.59 per cent to close at Rs 263.40 on the BSE.

Jet Airways pilots threaten legal action over dues by next week

After going soft on the management for over the past few months on pending salaries, the National Aviators Guild, the domestic pilots body of Jet Airways, on Tuesday threatened to take legal recourse unless their dues are not cleared by early next week.

Meanwhile, airline chief executive Vinay Dube in a communication to the staff said the management “continues to work with the consortium of lenders on the resolution plan.”

In a legal notice to Dube, the guild, which claims membership of around 1,100 domestic pilots, said each day they are left worried as salary arrears keep piling up.

Pilots, along with engineers and senior executives, have not been paid for the last three months amid a cash crunch at Jet Airways that began last July, and saw an ownership change last month with banks taking majority shares and founder chairman Naresh Goyal leaving the airline and halving his stake-holding in the airline.

Along with these staff, Jet Airways had defaulted on the payment of March salaries to other employees as well.

While delaying salaries of its entire 16,000 workforce for the third time since last September, on April 3, Jet Airways had informed employees of providing an update on April 9. But the management on Tuesday had nothing concrete to share.

“My client (NAG) calls upon the management to pay their salaries dues for January, February and March, by April 14 and future salaries by the first of every month. Failing which my client shall be constrained to resort to all constitutional and legal means to get their salaries,” read the legal notice.

Late March, the guild had warned of a “no flying call” from April 1 over delayed salaries, which they had deferred to April 15.

“Non-payment of salaries is leading to extreme stress, anxiety and frustration amongst the pilots—hardly an ideal situation for them to be in the cockpits. It hardly needs to be said passenger safety—the prime concern of all—requires pilots fly stress-free,” said the legal notice.

Acute financial crunch has forced Jet Airways to ground three-fourths of its fleet, leading to massive flight cancellations and delaying all payments including salaries.

Stating Jet Airways is focused on securing interim funding to sustain, and eventually increase its current level of operations, Dube in the letter to the staff said the highest priority is to get more planes flying and to pay salaries.

The focus is also on “supporting the bank-led balance sheet restructuring efforts to bring in fresh equity into the airline,” he added.

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