Indian lender to auction Jet Airways' office space over loan default

INDIA’S private sector lender, HDFC Ltd has decided to auction a prime office space owned by Jet Airways at Mumbai's Bandra Kurla Complex (BKC).

Jet Airways, which was until recently India’s second-largest airline failed to repay the loan amount of Rs 4150 million (£45.74m) to HDFC Ltd, one of its 11 lenders including nine Indian banks.

The property which covers 52,775 square feet is part of Jet Airways Godrej BKC, a 12-storey premium commercial building.

The property is scheduled to be auctioned on May 15 at a base price of Rs 2.45 billion, Indian financial daily- Mint reported.

"The borrower has failed to repay the amounts due to HDFC Ltd. Accordingly, HDFC Ltd has become entitled to enforce its mortgage over the immovable property," a public notice issued by the bank said.

Popularly known as Godrej BKC, the office complex was developed by Godrej Properties Ltd in partnership with the airline which owned the prime land.

Naresh Goyal founded airline obtained the land in 2008 for Rs 8.26bn through an auction.

According to the real-estate dealers, the property is expected to attract many investors as its located in a strategic business location and there is a shortage of prime office space in India’s commercial capital.

Earlier, Jet Airways was forced to halt all its operations last month after its lenders refused to pump more funds to keep the airline flying.

Once India’s largest private airline Jet, saddled with around $1.2 billion (£923 million) of bank debt.

Cash crunch hit company also defaulted on the payments to the lessors, employees, and others.