FE: Jet Airways revival: Anil Agarwal’s family trust, two foreign funds bid for debt-ridden carrier

11 August 2019: Beleaguered airline Jet Airways has received expressed of interest (EoI) from three companies out of which one happens to be Volcan Investments — the family trust of Vedanta’s Chairman Anil Agarwal while the other two bidders are foreign funds — Panama-based investment firm Avantulo Group and Russian Fund Treasury RA Creator, CNBC-TV18 reported citing multiple sources. However, Etihad Airways and Hinduja Group haven’t expressed their interest in bidding, sources indicated.

Volcan Investments, which count Anil Agarwal and family as its key stakeholders, will have Agarwal entering into the aviation market if it succeeds in bidding. The received EoIs will be examined by the resolution professional following which the final binding bids will be sought from the selected players that is likely to be submitted by September 12, as per an earlier note to exchanges by the resolution professional. “This process is being managed by the resolution professionals and at this time, out of respect for the process, Etihad Airways has no comment to make,” Etihad Airways spokesperson said in a statement to CNBC-TV18.

Jet Airways’ final resolution plan is likely to be submitted on September 27 to National Company Law Tribunal (NCLT) for approval, Financial Express had reported. The tribunal had started insolvency proceedings against Jet Airways on June 20 after an application by the State Bank of India. The NCLT sought faster resolution for the airline since the matter was considered to be of ‘national importance’. Judge VP Singh, in his order, had urged the resolution process to be over within 90 days.

The airline’s lenders had extended the EoI submission deadline by a week to August 10. Late last month, the resolution professional Ashish Chhawchharia had floated EoIs for selling stake in the airline. Jet Airways had to cease operations on April 17 as lenders refused giving emergency funds following which the ministry of civil aviation had to re-allocate the Jet’s slots to other airlines on a temporary basis till October.

The Financial Express reported

LM: IL&FS proposes to NCLT sale of wind energy assets to ORIX of Japan

11 August 2019: Embattled IL&FS group has proposed to the National Company Law Tribunal (NCLT) the sale of its wind energy business to Japan’s Orix Corporation, which will help reduce the debt of the company by ₹4,800 crore.

Infrastructure Leasing and Financial Services (IL&FS) said in a statement it has filed the proposal to complete the sale of its wind energy business, held under IL&FS Wind Energy Limited (IWEL) to ORIX Corporation of Japan, with NCLT for final approval.

The proposal has been filed before the Tribunal after completing binding Share Purchase Agreement with ORIX Corporation and obtaining “in-principle” approval from all lenders for completing this transaction, subject to NCLT approval.

IL&FS said it had already received approval for the sale of its wind energy business from Justice (Retd) D K Jain, appointed by the NCLAT to supervise the operation of Resolution Process of IL&FS group companies, earlier last month.

Justice Jain had approved the sale on the conditions that the proposal will be placed before the NCLT for its approval and the bid amount realised from the sale be kept in an escrow account.

This amount in escrow account will only to be disbursed in accordance with the directions in the proceedings, pending before NCLT/NCLAT, as applicable.

ORIX Corporation of Japan, owner of 49 per cent stake in each of seven operating wind power plants of the IL&FS Group, had expressed its intent to buy out the remaining 51 per cent stake held by IL&FS Wind Energy Limited (IWEL).

This intent to buy 51 per cent stake was in exercise of ORIX’s right under the terms of an existing MoU wherein ORIX can match the price offered by the highest bidder for purchasing IWEL’s stake in the wind Special Purpose Vehicle (SPV).

ORIX Corporation decided to match the offer of the highest bidder, of approximately ₹4,800 crore for 100 per cent of enterprise value, contemplating no haircut to the debt of the SPVs aggregating to around ₹3,700 crore.

Some of the major lenders in the SPVs include: Power Finance Corporation, Bank of Baroda (for working capital and project financing), and India Infra Debt Limited – with debt aggregating to approximately ₹3,700 crore (without interest).

The sale to ORIX will lead to resolution of the following seven companies of the IL&FS Group – Lalpur Wind Energy Private Limited, Etesian Urja Limited, Khandke Wind Energy Private Limited, Retadi Wind Power Limited, Wind Urja India Private Limited, Tadas Wind Energy Private Limited and Kaze Energy Limited.

The board of IL&FS has already approved the sale of these entities to ORIX Corporation in its board meeting held on 28 June.

The LiveMint reported

LM: DHFL seeks a ₹15,000-crore lifeline as resolution plan gets delayed

11 August 2019: Troubled mortgage lender Dewan Housing Finance (DHFL) has sought ₹15,000-crore immediate funding from banks for on-lending to retail customers as well as to project developers, say sources.

Last week, the nearly crippled company had submitted a draft resolution plan to lenders which are yet to be approved by them.

“The company has asked for an additional funding of ₹15,000 crore. The money will be used to fund viable projects that are stuck due to lack of money,” said one of the sources.

When contacted, a DHFL spokesperson said it did not have any comment to offer apart from what it has informed the stock exchanges last week on the draft resolution plan.

Under the draft resolution plan, the company has asked for funds from banks/NHB for restarting retail funding which was stopped after liquidity crisis hit it late year.

According to sources, the decision on any additional or the quantum of funding will be taken only after due deliberations by lenders.

The beleaguered home financier, which has defaulted on multiple times on payment to bondholders since June owes close to ₹90,000 crore to banks, the National Housing Bank (NHB) and other creditors.

Last month, lenders had signed an inter-creditor agreement (ICA), as mandated by the Reserve Bank in the new NPA resolution/recognition framework effective June 7.

However, the company had said one of its debenture – trustees Catalyst Trusteeship Servicesis in the process of seeking consent from the debenture holders to be a party to the ICA.

In a separate filing to exchanges on 8 August, the company said it may not be able to meet its financial obligations in the near future.

“Given the ongoing discussions on the resolution plan with the lenders who have signed the ICA, we believe that our payment obligations falling due in the immediate future, may not be met as per their existing schedule,” the company informed the exchanges.

It has been facing liquidity issue since last September and has back paid ₹41,000 crore of its financial obligations through a combination of securitization of assets and repayment collections since.

The Wadhawan family, who owns a little over 39 per cent, has been looking at various ways to come out of the stress which first came to light late last year following the IL&FS bankruptcy. These include selling stakes in group entities, including in the flagship to the extent of giving up half of their stake.

DHFL has seen a rash of rating downgrades in June after it defaulted on ₹1,150 crore to its bond-holders due on June 4. This led to a downgrade of its ₹850-crore commercial papers to ‘default’ by three rating agencies.

The LiveMint reported

TI: Etihad skips Jet Airways bid

11 August 2019: The lenders of Jet Airways have received only three bids for sale of the grounded airline’s stake, with equity partner Etihad Airways not submitting a bid on the last day of the extended bidding process on Saturday.

Etihad Airways holds a 24 per cent stake in Jet Airways.

Sources told PTI that the banks received expressions of interest (EoIs) from three entities, of which two are financial players and another is a player in the global aviation space.

Saturday was the last day for submitting EoIs, after the time was extended for a week on August 3.

“Three bids have been received… but Etihad Airways did not submit bids this time around,” a bank source said.

Industry sources said the Hinduja group, which had shown interest earlier, also did not turn up this time.

Panama-based fund Avantulo Group is one of the three entities which have submitted EoIs, said another source.

The three EoIs will be reviewed by resolution professional Ashish Chhawchharia to ascertain their eligibility.

Late last month, the resolution professional had floated EoIs for selling stake in the airline that stopped flying mid-April.

The SBI, the lead banker to the airline, has approved Rs 10 crore interim funding and other banks are also in the process of approving the same, bankers had said.

The lenders had on June 17 decided to take the airline, which stopped flying on April 17, to the NCLT as they could not find a buyer.

Early July, the resolution professional had said he had received claims worth over Rs 25,500 crore as of July 4, including over Rs 200 crore from founder Naresh Goyal, which was rejected.

State Bank has made a claim of Rs 1,644 crore, including cash credit inclusive of interest, term loans and bank guarantees.

Yes Bank has claimed Rs 1,084 crore, followed by PNB’s Rs 963 crore and IDBI Bank’s Rs 594 crore. 

The Telegraph India reported