The Chief Investment Officer of Challenge Group, the parent entity of Ace Aviation, has expressed concerns that if they are unable to purchase three Boeing 777-300ERs from Jet Airways, they may need to reconsider their entry into the Indian market.
In 2022, Ace Aviation entities, including Ace Aviation VIII Limited, Ace Aviation IX Limited, and Ace Aviation X Limited, entered into an agreement with the Jet Airways monitoring committee to acquire three grounded Boeing 777s. Jet Airways ceased operations in 2019. The Ace entities paid a deposit of USD 5.6 million and signed letters of intent. However, the sale process was halted in November 2022 due to disagreements among the committee members, particularly objections from the Jalan Kalrock Consortium (JKC), despite their prior non-objection. This issue has been tied up in litigation since then.
In March 2024, the Supreme Court of India upheld previous National Company Law Tribunal and National Company Law Appellate Tribunal decisions to permit the sale of the aircraft. Despite this, the aircraft have not yet been transferred to Ace Aviation.
“We have faith in the Indian judicial system, and we need the cooperation of other parties to finalize the deal,” said Michael Coish, Challenge Group CIO, to the Hindu Business Standard. “However, despite our significant investment and efforts, if the deal does not happen, we will have to reconsider whether India is the right market for us.”
Coish mentioned that Challenge Group has secured conversion slots for the aircraft in early 2025, and any delays would be problematic. “If this delay in procurement extends beyond our estimated timeline, we will have to immediately look for alternative aircraft,” he said. “We have already contacted some potential vendors to explore the related Boeing 777-300ER opportunities in the market.”
This is the second time in two months that Coish has voiced concerns on this matter. “We have now decided enough is enough,” he was recently quoted. “If the monitoring committee, including the lenders and JKC who have attempted to block the sale, continue to procrastinate, we would sadly walk away from this deal and take our USD 5.6 million back with full interest.
