Finally, Lenders drag Jet Airways to NCLT
After the failed attempt of many weeks to get the Jet revived the SBI-led consortium of lenders have decided to file for insolvency proceedings as the last resort, the first hearing scheduled to take place on June 20
June 17, 2019
Lenders to Jet Airways have decided to seek resolution for the grounded airline from National Company Law Tribunal (NCLT) for insolvency proceedings. In a statement issued to media on Monday, the lenders said finally they are seeking resolution under the Insolvency and Bankruptcy Code (IBC) after a failed stake sale attempt and harrowing search for new investors.
Lenders Issued statement
"A meeting of lenders was held today to consider the way forward in respect of Jet Airways. After due deliberations, Lenders have decided to seek resolution under IBC since only a conditional bid was received and requirement of the Investor for SEBI exemptions and resolution of all creditors is possible under IBC. Lenders led by State Bank of India have been making efforts to find a resolution for Jet Airways outside IBC but in view of the above, lenders have decided to seek a resolution within the IBC process," the statement said.
Jet Airways had stopped operations on April 17, 2019, after getting no financial support from the lenders any further. Currently, the airline is burdened with outstanding loans of Rs 8,400 crore and total liabilities worth Rs 15,000 crore. However, the experts say that with the airline now going to NCLT, lenders may be able to recover only a fraction of the Rs 8,400 crore it owes them. For past, a couple of months the lenders have been trying to resolve the insolvency crisis at Jet Airways outside NCLT under the fear of little or no recovery only.
Total liabilities beyond Rs 15,000 Cr
Under the bank-led resolution process, Etihad had earlier agreed to invest in the grounded airline, provided it remained a minority investor. In the past few weeks, lenders have held talks with potential investors like Etihad and the Hinduja Group in hope of reviving Jet but there was no formal proposal.
The NCLT is scheduled to hear insolvency petitions filed by the airline's operational creditors for recovery of dues on June 20.