July 19, 2019 / 2:19 PM / a month ago

Jet Airways' lenders approve interim finance plan for the carrier

FILE PHOTO: Jet Airways aircraft are seen parked at the Chhatrapati Shivaji Maharaj International Airport in Mumbai, India, April 18, 2019. REUTERS/Francis Mascarenhas/File Photo

MUMBAI (Reuters) - Lenders to Jet Airways (JET.NS) agreed on Friday to provide some interim financing to the bankrupt airline to help it cover legal and other costs, as resolution experts look to find a potential buyer.

In a regulatory filing, bankruptcy resolution firm Grant Thornton said Jet’s lenders had also approved the eligibility criteria for potential buyers.

The filing did not say how much interim funding had been approved, but a source familiar with the matter told Reuters the lenders had agreed to provide $10 million.

The committee of creditors (CoC), via an electronic voting process, also agreed to appoint SBI Caps to help with the whole resolution process.

SBI Caps, the investment banking arm of State Bank of India (SBI) (SBI.NS), previously led an unsuccessful sale process for the airline before it was dragged to bankruptcy court.

The source said Grant Thornton planned to open bidding for the airline on Saturday. The only criterion for bidders will be having a net worth of 10 billion Indian rupees ($145 million), added the source.

This is similar to the parameter used when lenders initially tried to sell the airline. Bidding is likely to be open for 15 days and may be extended if there are no suitors, said the source.

Last month, Jet’s creditors, led by SBI, took the airline to bankruptcy court after failing to agree on a revival plan.

Financial creditors, who have the first right to proceeds recovered from a bankruptcy resolution, have submitted claims worth 102 billion rupees out of which 85 billion have been admitted. Apart from this, about 2,400 operational creditors have made claims worth some 123.72 billion rupees, according to reports.

Reporting by Nupur Anand; Editing by Mark Potter

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