European cargo airline moves tribunal to acquire 3 Jet Airways aircraft

A European cargo airline has moved the National Company Law Tribunal seeking expeditious acquisition of three Jet Airways B777-300 aircraft.

The application is by a Malta-based Ace Aviation VIII Limited, which emerged as a successful bidder in the auction of three Boeing 777-300ER aircraft.

The firm is part of a Belgium-based cargo airline and its application will be heard on Wednesday.

The application is a fresh challenge for reviving Jet as an airline union has opposed the sale of assets until employees receive provident fund (PF) and gratuity.

Jet, which shut operations in April 2019, has eleven aircraft including Boeing 737, Boeing 777 and Airbus A330 planes.

The asset sale is part of the revival process and upside from the sale is to be paid to the grounded airline's creditors as a part of the resolution plan.

Earlier this year, the monitoring committee overseeing the revival invited bids for selling the aircraft.

Ace Aviation emerged as a successful bidder for three Boeing 777-300ER aircraft and letters of intent were issued to the firm.

It paid $4.6 million as earnest money deposit and token money deposit for the purchase of these aircraft. It further paid another $1 million to participate in the auction of two other Boeing 777 aircraft.

The parties were supposed to execute an escrow arrangement and complete the sale process for the three planes by December 16.

However, Ace Aviation on November 11 received an email from the monitoring committee on abeyance of sale process till further notice.

"We expect to resume the process within the next 60-90 days approximately," said the email.

“The decision to keep the sale process in abeyance for an extended period for up to 60-90 days approximately provides no specific time limit to the auction and sale process and accordingly gives no assurance to the applicants…Furthermore, extending the time-limit without any reason whatsoever is arbitrary and contrary to commercially reasonable and prudent standards.

"Moreover, on each day of delay, the assets are depreciating in value…..,” the firm said in its application while seeking “a speedy and time-bound sale of assets.

The All India Jet Airways Officers and Staff Association in November served a legal notice to the monitoring committee stating that no sale of assets of Jet Airways can be undertaken until such a time that payments of PF and gratuity dues to staff are completed in accordance with court orders.

On October 21, the National Company Law Appellate Tribunal directed the Kalrock-Jalan consortium to pay PF and gratuity dues to Jet employees till the date of insolvency commencement in June 2019.

Turbulence continues

• Ace Aviation VIII emerged successful bidder in the auction of three Boeing 777-300ER aircraft
• It paid $4.6 million as earnest money deposit and token money deposit for the purchase of these aircraft
• A union has opposed the sale of assets until employees receive PF, gratuity
• The parties were supposed to complete the sale process for the three planes by December 16
• However, Ace Aviation on November 11 received an email from the monitoring committee on abeyance of the sale process