Lenders to Jet Airways (India) Ltd on Monday decided to refer the company to National Company Law Tribunal (NCLT) for bankruptcy proceedings. In a statement, the lenders said that they have received only a conditional bid from investors.
“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," the lenders further said in the statement.
Mint was the first to report on 11 June that London-based Hinduja Group has decided to halt negotiations to buy a stake in Jet Airways, while Etihad Airways of Abu Dhabi has put on hold a plan to add more investments in the Mumbai-based airline.
The lenders will join the two operational creditors, Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt. Ltd, which have filed separate insolvency pleas against Jet Airways at NCLT, Mumbai, for recovery of their dues.
According to details available on the website of the Ministry of Corporate affairs, Shaman Wheels is a motor dealership in Mumbai and Gaggar Enterprises a mineral water producer in Ahmedabad.
With the company now going to NCLT, lenders may be able to recover only a fraction of the ₹8,400 crore it owes them. The total liabilities of the airline, including unpaid salaries and vendor dues, are nearly ₹15,000 crore.
Lenders to Jet Airways, led by SBI, have been trying to resolve the insolvency crisis at Jet Airways outside NCLT due to fear of little or no recovery. Under the bank-led resolution process, Etihad had earlier agreed to invest in the grounded airline, provided it remained a minority investor.
Jet Airways hasn’t flown since 17 April after it grounded all its operations due to an acute shortage of funds.
Shares of the country's first private airline plunged 18% Monday as stock exchanges last week decided to impose restrictions on its trading from 28 June.
The scrip tanked 16.76% to close at ₹68.30 on the BSE. During the day, it plummeted 19.56% to hit a multi-year low of ₹66.
At the NSE, shares plunged 18% to close at ₹66.95.
