MUMBAI: Lenders to Go First on Monday discussed extending the period for arriving at a corporate insolvency resolution plan (CIRP) by three to six months. With no outside bidder in sight for the beleaguered airline, lenders are considering approaching the Wadias – the promoters of the airline – to inquire if they have any plans for running the company. Banks, having expended Rs 100 crore on the airline’s salaries and other operational costs, are apprehensive about making a decision. They fear that a new legislation might be interpreted as applicable with retrospective effect, potentially enabling lessors to repossess the aircraft.
The Wadia group initially conveyed their intent to approach the bankruptcy court to restructure the airline’s liabilities and restore its viability. However, as the process commenced, the promoters have remained silent. During the expression of interest phase, Naveen Jindal’s Jindal Power submitted bids but was not deemed a serious contender. Although the airline is under bankruptcy, the promoter Wadia group includes several blue-chip companies, including Britannia Industries, Bombay Dyeing, and Bombay Burma.
Lenders are currently assuming the role of the board of directors in their capacity as a committee of creditors.
The Wadia group initially conveyed their intent to approach the bankruptcy court to restructure the airline’s liabilities and restore its viability. However, as the process commenced, the promoters have remained silent. During the expression of interest phase, Naveen Jindal’s Jindal Power submitted bids but was not deemed a serious contender. Although the airline is under bankruptcy, the promoter Wadia group includes several blue-chip companies, including Britannia Industries, Bombay Dyeing, and Bombay Burma.
Lenders are currently assuming the role of the board of directors in their capacity as a committee of creditors.
Unique perspective:
The potential delay in the resolution plan for the Wadia group highlights the challenges faced by lenders in dealing with the bankruptcy of the airline. The lack of outside bidders and the uncertainty regarding retrospective legislation add to the complexity of the situation. It remains to be seen how the Wadias will respond and whether they have any viable plans for running the company. As the lenders take on the role of the board of directors, their decision-making process becomes crucial in determining the future of the airline. The involvement of prominent companies under the Wadia group further adds to the significance of this case.
