Russian sovereign fund shows interest in defunct Jet Airways
20 February 2020
Russian government-owned Far East Development Fund in consortium with Mumbai-based Enso Group has expressed interest in acquiring bankrupt Jet Airways.
Enso Group made a presentation to the committee of creditors (CoC) of the defunct airline and the lenders are reported to have in-principle agreed to give time till 9 March for interested parties to present a resolution plan for Jet.
The earlier deadline for presenting a resolution plan for Jet Airways expired on 17 February. But the CoC had not received any resolution plan by then.
Representatives of the Russian fund also met lenders over a video-conference and proposed synergising Jet’s operations with Russia’s flagship carrier, Aeroflot, sources said.
“Representatives from the Far East Development Fund met lenders. They have proposed to synergise Jet Airways with Aeroflot. Lenders have in-principle agreed to give some more time.
Set up in 2011, the Far East Development Fund is a state finance development institution which warrants a flexible approach to projects' structuring and financing, as per its Linkedin profile.
Enso Group has reportedly been roped in to find an Indian partner to form a consortium that would later put in a formal bid.
The Far East Development Fund has interests in diverse sectors, including oil and gas, metal mining, healthcare, infrastructure and real estate, as per its website.
Besides Enso Group-Far East Development Fund combine, at least two other entities were understood to have shown interest in Jet Airways. One of the parties, the Colombian Synergy Group, had engaged with the lenders of the airline for over four months but did not take things forward. Another party, Prudent ARC, a Delhi-based asset reconstruction firm, sought more time to submit a plan.
The 270-day deadline for the resolution of Jet Airways expires on 15 March. The beleaguered airline was admitted for insolvency last June. “March 9 may not be enough time for the group to present a resolution plan. The consortium will then have to ask the National Company Law Tribunal (NCLT) for more time. Then it’s up to the court’s discretion,” another person said.
While admitting Jet for insolvency the Mumbai bench of the NCLT had directed that the resolution should be done expeditiously as it was a matter of “national importance”.
Simltaneously, the resolution professional of the airline is reported to be working on a deal with KLM Royal Dutch Airlines to sell Jet Airways’ Amsterdam business. The deal, according to an earlier report in the Financial Express, had said that a deal worth around $23 million was in the works for one aircraft and Schiphol airport slots earlier belonging to Jet Airways.
According to Jet Airway’s website, creditors have filed claims worth Rs35,221 crore against the airline, of which the resolution professional has so far admitted claims worth Rs14,017 crore. Domestic banks and financial institutions alone have filed claims worth Rs6,400 crore.
The Far East Development Fund is a 100 per cent subsidiary of Russian government-owned Bank for Development and Foreign Economic Affairs (Vnesheconombank), which primarily provides long-term priority funding to Russian projects. Internationally, it has partnered with South Korean and Japanese government entities to attract foreign investment into Russia.