Challenge Group Considers Exiting Jet Airways Boeing 777 Purchase Amid Delays

Malta-based Challenge Group, the successful bidder for three Boeing 777-300ER aircraft from the defunct Jet Airways, is contemplating abandoning the deal due to prolonged delays. The acquisition process has been stalled for nearly two years, prompting frustration from the investment company. Challenge Group has signaled its potential exit from the agreement, depending on the outcome of a crucial appeal to India’s National Company Law Tribunal (NCLT) set for a decision on May 17.

Michael Koish, Chief Investment Officer of Challenge Group, expressed significant dissatisfaction with the ongoing delays, hinting at a decisive move if the situation remains unresolved. “We have now decided enough is enough. If the monitoring committee, including the lenders and Jalan Kalrock Consortium (JKC) that has 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,” Koish stated in an interview with the Financial Express.

The Jalan Kalrock Consortium had acquired the rights to purchase Jet Airways following its collapse in 2019 but has faced its own set of challenges, including disputes with creditors that have complicated the transaction.

Despite a favorable ruling from India’s Supreme Court on March 7, 2024, which declined to block the sale of the aircraft to Ace Aviation—a special purpose vehicle of Challenge Group—the transfer of the planes has yet to progress. Koish highlighted the inaction following the court’s decision, “We don’t understand what’s going on here. On the one hand, we have the Supreme Court [making] a very clear decision to continue with the deal. On the other, nobody wants to actually do anything productive.”

Koish further elaborated on the group’s efforts to finalize the deal, including multiple trips to India, which have so far not resulted in any significant advancement. This lack of progress has led Challenge Group to seek intervention from the NCLT earlier this month, hoping for a resolution that will clarify their position and facilitate the finalization of the transaction.

The outcome of the NCLT’s decision could either propel the deal forward or lead to Challenge Group retracting its investment and abandoning the acquisition, marking another twist in the prolonged saga of Jet Airways’ asset liquidation.