Indian Oil halts fuel supply to Jet Airways over non-payment of dues

Darnell Taylor
April 13, 2019

With no potential buyer in sight for Jet Airways, the troubled airline's lenders led by State Bank of India on Wednesday extended the deadline for submitting initial bids to Friday. The extension of deadline was due to some changes and clarifications they issued in the bid document on April 8.

Air Canada, AirAsia and Vistara are some of the airlines which have made enquiries on the bidding process for taking over Jet Airways.

The lenders have offered a stake from 31.2 to 75 per cent of the company on a fully diluted basis. Any interested parties will then have until April 30 to make a formal bid.

Jet Airways has financial problems.

The country's largest oil marketing company (OMC) Indian Oil Corporation (IOC) has once again stopped fuel supply to Jet Airways.

"Bidders are required to provide the solvency certificate. on their letterhead and certified by managing director/ full time director / chief executive officer of the bidder or a person holding an equivalent position in the bidder", it said.

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"Once we restore the much-needed network stability of the airline, our highest priority is to get more planes flying and to pay your salary arrears", Dube said in a communication to employees.

"The cargo agent seized Boeing 777-300 ER (VT-JEW) of Jet Airways at the Amsterdam airport as the airline could not clear his dues", the airline source said.

To add to the airline's woes, aviation regulator Directorate General of Civil Aviation announced on Wednesday it de-registered seven Boeing 737-800 aircraft of Jet.

While delaying salaries of its entire 16,000 workforce for the third time since last September, on April 3, the airline had informed employees of providing an update on April 9. Abu Dhabi-based Etihad agreed to exit from the ailing airline in stages.

The banks have appointed SBI Capital Markets to assist them in the formulation of a resolution plan, which includes undertaking a competitive bidding process.

Naresh Goyal, Founder, Jet Airways told lenders seeking to rescue the carrier that he will pledge the rest of his shares to them on condition they release the promised interim loan funding of INR 1,500 crore without delay, said three people with knowledge of the matter.

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