October 7. That is when the tenure of Rajnish Kumar as the Chairman of State Bank of India gets over. And that is why the date has come in play in the Jet Airways insolvency process even as lenders, sources say, meet on September 30 and start the voting process.
The moot question is: Will the airline get a new owner before Kumar completes his tenure and his successor Dinesh Kumar Khara takes over?
For that to happen, the SBI-led committee of creditors (CoC) will have to vote on the two bids presented by the two competing suitors - the consortium led by Flight Simulation Technique Centre (FSTC) and consisting of Big Charter and Imperial Capital, and the consortium led by Kalrock Capital and Murari Lal Jalan.
Sources told Moneycontrol that the voting, which will be online, could begin from September 30. "Normally it is a long-drawn process and can take up to two weeks," said a senior executive. Each lender has to individually evaluate the two proposals and then cast its vote.
While another senior executive close to the banks said the outgoing SBI Chairman could hasten the process, a long weekend - starting October 2 on Friday - could make it a challenge.
The voting happens after a yet another delay in the insolvency process. On September 28, when the CoC was to meet and banks would have possibly begun voting, a decision was taken to give the two sides an opportunity to revise their offers.
This happened after the FSTC-led consortium offered to improve its resolution plan. "The two sides have been given a few more days to resubmit their plans. They will be asked to make a presentation, and the voting will happen after that," a senior executive told Moneycontrol.
However, that led to the Kalrock-Jalan combine taking exception to the delay. In a strongly worded letter to the lenders on September 29, the consortium highlighted what it says is "total disregard to the timelines set for the final submission of the resolution plan".
The deadline for Jet Airways corporate insolvency resolution process, or CIRP, is October 21.
Following on its letter to the lenders, the Kalrock-Jalan consortium has told the banks that it is "committed to the process".
Interestingly, while it has asked the lenders to consider its plan submitted on September 21, the combine has said: "We have no objection if the last commercial offer made by FSTC consortium on September 28, 2020, is considered, provided that no further extensions or opportunities are granted to them to make any further changes in their plan."
Sources added that the FSTC-Imperial consortium has "improved" upon its offer, specifically on the timeline of repayment to the lenders.
Meawhile, industry observers have come down heavily on the delay. And so have former employees of Jet Airways.This is what one of them said:
This clearly shows how unprofessional & unprepared coc has been in managing resolution of Jet..After asking bidders for final bids by today,they have again extended submission of bids by a week...Only the bid submission date keeps extending... pathetic is the word.
— Sachin (@Sachin81224590) September 30, 2020
Industry observers repeatedly cite the example of the Virgin Australia sale that was completed in five months.
While the delay has been criticised, now it has emerged that the two sides have also accused each other of having no regard for the process. The Kalrock-Jalan combine had hinted the same in its letter to the lenders, asking them "not to allow the FSTC consortium to thwart the resolution process through unethical means".
"Why did the lenders give more time after final bids were placed," asked a source.
On the other hand, some executives have questioned the Kalrock-Jalan consortium's "hurry" when the process deadline is October 21. "It gives enough time. Why do they want to push the process," queried a senior executive.While the FSTC consortium is being advised by consultancy Deloitte and law firm Luthra & Luthra, Alvarez & Marsal is helping the banks evaluate the bids.