BS: Naresh Goyal may bid for stake in Jet Airways

11 April 2019: In a new twist to the Jet Airway saga, its erstwhile promoter Naresh Goyal is said to be planning to bid for the airline from which he had to step down as chairman last month only.

This is being seen as a dramatic comeback, when the former chairman will be chalking out plans to submit an expression of interest (EoI) for the distressed Jet fleet.

Official sources said in the absence of strong interest from buyers, Goyal’s possible bid could at least see some concrete movement with a certain roadmap and prevent any chance of its heading towards National Company Law Tribunal (NCLT).

Bankers fear once it goes to the NCLT, recovery of their loans will be late and with haircuts.

Sources in the knowledge of developments said Goyal was expected to submit an EoI on Thursday but it could not be ascertained if he was joining the fray alone or in partnership with private equity players.

The fact that Goyal could still enter the Jet Airways was clear on March 27 when State Bank of India (SBI) chairman Rajnish Kumar said the buyer could be anyone, a financial investor, an airline. There is no legal bar on anyone with a funding and revival plan in place. The option is open for anyone including Naresh Goyal and Etihad to bid for the stake.

Goyal had stepped down as chairman of the airline on March 25 as part of a deal with lenders. Banks were then expected to bring in Rs 1,500 crore in emergency funding, and then look for a new owner. However, banks have transferred just a small part of the funding of few hundred crores and instead called for an EoI from interested bidders looking to take control of the Jet Airways.

While the deadline was set for April 10, SBI Capital, which is overseeing the bidding process, extended it by two days to April 12 owing to poor response.

The SBI is leading the consortium of lenders that has an exposure of Rs 8,500 crore to the cash strapped airline.

On April 10, SBI Capital said it has received some EoIs and has extended the deadline in an attempt to clear the way for more suitors.

Clarifying on the EoI guidelines, the lenders said they have now allowed restructuring of the debt and infusion of funds by way of loans or acquisition of up to 75 per cent stake in the company.

The earlier announced guideline mandated the buyer to “settle” loan obligations of Jet Airways. The troubled airline has a debt of over Rs 8,500 crore.

Apart from Etihad Airways, which holds 24 per cent stake in Jet Airways, other interested players include private equity majors, and sovereign fund National Investment and Infrastructure Fund (NIIF).


The Business Standard reported

ET: NCLAT asks winning bidder to raise offer for United Seamless

11 April 2019: In a likely first in India’s recent bankruptcy history, an appeals court has set aside a lender-approved resolution plan on the ground that the proposed upfront payment for the stressed asset, Indo-Malaysian joint venture United Seamless Tubular, was significantly lower than the average liquidation value.

The National Company Law Appellate Tribunal (NCLAT) said that the resolution plan approved by the committee of creditors (CoC) also discriminated against operational creditors, and did not give them the same treatment as it did to financial creditors. So, the court ordered the winning bidder, Maharashtra Seamless, to raise its offer to Rs 597.5 crore from Rs 477 crore.

Earlier, United Seamless and one of the dissenting lenders Indian Bank had moved the NCLAT, seeking action against the resolution professional (RP). They accused the RP of colluding with the bidder of his choice and favouring the bidder by undervaluing assets of United Seamless.

Hyderabad-based Kamineni group owns 60% of United Seamless, with Malaysia’s UMW group holding the rest in the joint venture. Its facility near Hyderabad manufactures seamless pipes used in the oil and gas and automotive industries.

NCLAT was responding to petitions filed by promoters of United Seamless and Indian Bank, challenging the NCLT order of January 21 that accepted the resolution plan of Maharashtra Seamless after the CoC approval. NCLAT was also responding to a petition filed by Maharashtra Seamless against February 28 orders of NCLT, which had refused to direct the police and district collector to take over charge of the debtor.

The Economic Times reported

ET: Patanjali moves closer to acquisition of Ruchi Soya

11 April 2019: Patanjali Ayurved’s proposed acquisition of Ruchi Soya has reached the final stages with the Committee of Creditors (CoC) meeting on Tuesday to clear the proposed deal, two officials directly aware of the developments said.

“The deal is likely to be announced this month,” one of the officials mentioned above, said.

Patanjali Ayurved spokesperson SK Tijarawala confirmed the committee of creditors meeting on Tuesday but declined to comment on details.

An email sent to Ruchi Soya’s spokesperson remained unanswered till press time.

Last month, the Baba Ramdev led Patanjali revised its offer to acquire the debt-laden Ruchi Soya Industries to Rs 4,350 crore, Rs 200 crore more than it had offered earlier and topping Adani Wilmar’s bid of Rs 4,100 crore.

Of the Rs 4,350 crore, Rs 115 crore will come as company equity, while the balance Rs 4,235 crore will be distributed among financial creditors. Public sector lenders IDBI Bank and SBI have the highest exposure to Ruchi Soya, the bankrupt edible oil company. Adani Wilmar was the other bidder, but withdrew recently citing delay in completion of the insolvency process.

“Patanjali will submit details of the distribution of Rs 4,235 crore to financial creditors in a couple of days,” said an official close to the development. “The committee of creditors will meet in the third week of April again to discuss the disbursal of funds,” he added.

Packaged foods maker Ruchi Soya, saddled with an overall debt of close to Rs 12,000 crore, owns brands such as Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold. At the end of 2017, the debt-laden company was referred to the National Company Law Tribunal (NCLT) following petitions from creditors Standard Chartered Bank and DBS Bank.

For the Haridwar-based Patanjali Ayurved, which approached the NCLT against the lenders’ decision in favour of Adani Wilmar, the potential acquisition of Ruchi Soya will be its biggest.

Shailendra Ajmera is the resolution professional (RP) appointed by NCLT on the application of creditors Standard Chartered Bank and DBS Bank under the Insolvency and Bankruptcy Code.

Patanjali Ayurved, which makes staples, personal care and packaged foods, saw revenues for the year ended March 2018 decline 10% to Rs 8,135 crore from Rs 9,030 crore in FY17 after five years of impressive growth, according to data from research platform Tofler. Company chief executive Acharya Balkrishna had attributed the slowing sales to its supply chain and distribution network not being able to keep pace with its growth, in addition to internal restructuring.

The potential acquisition of Ruchi Soya will help the ayurveda bellwether gain captive brand share, the largest oil seed extraction capacity in the country, and 24 plants of crushing, milling, refining and packaging edible oils. Ruchi Soya is also one of the country’s largest exporters of valueadded soy products.

The Economic Times reported

LM: Jet Airways stake sale draws interest from four firms

11 April 2019: India’s quasi-sovereign wealth fund, Etihad Airways PJSC and two financial investors have shown interest the Jet Airways stake sale, even as lenders to the ailing airline extended the bidding deadline by two days to Friday.

Private equity firms TPG Capital and Indigo Partners, National Investment and Infrastructure Fund Ltd (NIIF) and current Jet Airways shareholder Abu Dhabi-based Etihad Airways PJSC have submitted their expressions of interest (EoIs), a person with direct knowledge of the matter said.

“The lenders are currently waiting for EoIs from Air Canada and Delta Airlines,” the person said, requesting anonymity, adding the two carriers are likely to submit their initial bids in the next two days, meeting the new deadline set by the lenders.

The lenders originally set Wednesday evening as the deadline for submitting EoIs to buy a controlling stake of up to 75% in Jet Airways. This has been extended to 6pm on Friday.

“As part of the process, we are in receipt of some EoIs and some more persons have expressed desire to participate if additional time is provided. Accordingly, in order to allow better participation in the process the domestic lenders have agreed for extension timeline for submission of Expression of Interest which have been updated and made available on the websites,” SBI Capital Markets Ltd, the adviser to the consortium of lenders to Jet Airways said in a statement. The investment bank did not disclose the parties that have submitted their initial bids so far.

NIIF, Etihad, Air Canada and Delta Airlines didn’t respond to emailed queries.

A spokesperson for TPG Capital declined to comment.

Indigo Partners also declined to comment.

With Jet Airways in dire straits, the infusion of fresh funds by a new investor has become critical to stave off a potential bankruptcy.

Jet Airways has salaries pending since January to a section of its staff, including pilots, engineers and general managers. It has failed to pay plane lease rentals forcing lessors to ground a large part of its fleet. It has also deferred interest payments to banks and clearing dues with oil marketing companies.

Lenders to Jet Airways, led by the State Bank of India, have also modified the terms of the stake sale process by allowing restructuring of debt and permission to infuse funds into the carrier through loans.

Interested bidders would also have to provide solvency certificates before they submit their initial bids, according to the document issued to interested bidders, a copy of which was reviewed by Mint.

According to the document issued on 8 April, the lenders have now allowed “… restructuring of the existing facilities and infusion of funds by way of loans or acquisition/subscription of up to 75% of equity share capital of the company.”

Meanwhile, Indian Oil Corporation Ltd (IOC), which stopped supplying aviation fuel to Jet Airways earlier on Wednesday, resumed it from 8.30pm, a spokesperson for the state-run refiner said.

The spokesperson did not say why the fuel supplies had been restarted. The refiner stopped supplies as Jet Airways was yet to clear its fuel bills, the spokesperson said earlier.

Indian Oil had on 5 April stopped fuel supplies to Jet Airways but rescinded its decision within a few hours.

The SBI-led consortium took control of Jet Airways in late-March, promising to throw open a bidding contest for a new investor that is expected to be completed in the current quarter.

The lenders had in February agreed to convert a part of Jet Airways’ debt into equity by agreeing to take a 50.5% stake in the carrier, nominate two board members and make a cash infusion of about ₹1,500 crore into the airline.

However, the lenders are yet to convert their debt into equity. The Supreme Court had earlier this month quashed the Reserve Bank of India’s (RBI) 12 February circular, which prescribed rules for recognizing one-day defaults by large corporates and called for insolvency action as a remedy.

The circular directed lenders to refer any loan account over ₹2,000 crore under the bankruptcy code if it was not resolved within 180 days of default.

On Wednesday, Jet Airways shares fell 1.59% to ₹263.40 apiece on the BSE while the benchmark Sensex shed 0.91% to end the day at 38,585.35 points.

The LiveMint reported

FE: Jaypee Infra: Suraksha ARC makes cosmetic changes in revised resolution plan

11 April 2019: Suraksha ARC, in its revised resolution plan for the insolvent Jaypee Infratech (JIL), has proposed some cosmetic changes in the form of higher upfront payment to financial creditors and fixed deposit holders.

The Sudhir Valia-promoted company has offered to pay the financial creditors an upfront payment of Rs 18.55 crore against Rs 10 crore proposed in the plan submitted in February.

For operational creditors, the company said it will pay an upfront payment of Rs 10.26 crore under the revised resolution plan, which was submitted to the JIL committee of creditors (CoC) on Monday.

In its earlier plan, it said that payment will be in the same proportion as that of financial creditors.

“Resolution applicants (Suraksha) have proposed payment to the fixed deposit holders in cash and not by way of debt-land swap,” the company said in the revised plan.

On the upfront payment of Rs 18.55 crore to financial creditors, Suraksha said it shall be paid out of infusion of funds by way of equity. The funds shall be transferred to the SPV, which shall be further infused into the corporate debtor for repayment of debt.

According to a note prepared by IDBI Bank – Jaypee’s largest lender – the company’s actual value stands at Rs 17,111 crore, while its distress value is pegged at Rs 14,548 crore. JIL has Rs 9,000 crore outstanding to various banks.

Suraksha’s revised plan, which was seen by FE, reiterated that it will utilise the Rs 750 crore and interest accrued, which was deposited by Jaiprakash Associates (JAL), for completing the housing units.

The company will also arrange for a working capital credit facility of Rs 3,000 crore for the pending projects. It will infuse more funds if the requirement arises.

Reiterating its earlier plan, Suraksha promised to deliver the uncompleted housing units between one-four years. Jaypee home buyers, whose claims stand at Rs 13,918 crore, will only get the possession of their homes and no payment will be made towards penalty or rebate.

For the financial creditors, who have claims amounting to Rs 9,762 crore, the company, as proposed earlier, has offered to pay Rs 5,000 crore through a debt land swap deal.

Under this deal, the land shall be swapped with the debt of financial creditors in proportion to admitted claims by resolution professional Anuj Jain.

Another resolution applicant, state-run NBCC, will submit its revised resolution plan by April 25. It sought more time from the CoC citing changes at its top leadership, which led to a delay in getting necessary approvals. This is the second extension sought by the infrastructure major.

The Financial Express reported

ET: Hotel Leela given one month to settle JM Financial ARC’s dues

10 April 2019: The Mumbai bench of the National Company Law Tribunal (NCLT) has granted one month’s time to Hotel Leelaventure (HLVL) to clear its dues in a bankruptcy case filed by JM Financial Asset Reconstruction Company.

The BSE-listed hotel chain had sought four months’ time to settle its dues to JM Financial ARC after Canadian alternative asset management company Brookfield last month agreed to acquire its assets.

“We have sold assets of our company to Brookfield for around Rs 3,950 crore, but it will take a certain time for money to come, and only then we will be able to repay it to our lenders,” said Ashish Pyasi, an advocate with law firm Dhir & Dhir Associates who was representing Hotel Leelaventure in the case. “There is already an announcement with this regards on the stock exchange, but we are seeking four months’ time from the tribunal.”

On March 18, Vivek Nair-promoted HLVL had announced that the company’s hotel business, together with all the assets and liabilities of hotels located in Bengaluru, Chennai, Delhi and Udaipur were being acquired by Brookfield on a slump sale basis.

Rohit Gupta, the counsel for JM Financial ARC, informed the tribunal that the total debt of the company is about Rs 5,900 crore. “There were around 14 banks and financial lenders who have assigned their debts to JM Financial ARC and that’s how they become a financial creditor,” said Gupta, adding that one more firm, Phoenix ARC, has also taken over debt from four banks and has become a financial creditor of the company.

However, the NCLT bench, presided over by VP Singh and Ravikumar Duraisamy, observed that four months is too long a duration for the tribunal to grant and, hence, it is allowing a month’s time to the lender as well as HLVL to come out with a repayment plan.

The Economic Times reported