The State Bank of India (SBI)-led consortium has filed an insolvency petition against Jet Airways (India) Ltd at the National Company Law Tribunal’s (NCLT) Mumbai bench, according to a report by CNBC-TV18. Lenders on Monday had announced that they have decided to initiate bankruptcy proceedings against the airline to recover their dues after the search for an investor hit a dead end.
SBI has also selected Ashish Chhawchharia of advisory firm Grant Thornton for the crucial role of interim resolution professional for Jet Airways, Moneycontrol reported.
The interim resolution professional is a key component of the corporate insolvency process since the person appointed has to manage the affairs of the stressed company, facilitate the bidding process and balance the interests of all stakeholders.
“This is a very important insolvency case and all eyes are on this process after a stake sale attempt which failed after extensive negotiations with multiple suitors. The interim resolution professional will have to find a solution which keeps the interests of lenders, employees and customers in mind,” the Moneycontrol report quoted a source as saying.
As per the current norms, the interim resolution professional will have 270 days to find a suitable resolution for the stressed account, failing which the last option of liquidation will be relied upon. “The plan is to find a resolution for the Jet Airways account as soon as possible under the IBC (Insolvency and Bankruptcy Code) within 45-60 days and not wait till the end of the scheduled timeframe,” another person told Moneycontrol.
Meanwhile, NCLT is also scheduled to hear insolvency petitions filed by two operational creditors of Jet Airways — Shaman Wheels Pvt Ltd and Gaggar Enterprises Pvt Ltd — on 20 June.
Exactly two months after Jet Airways stopped operations on 17 April, lenders of the grounded airline released the following statement while announcing their decision to initiate bankruptcy proceedings against the airline: “A meeting of lenders was held today (17 June) 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 taking 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.”
Jet Airways’ lenders were trying to avoid the insolvency court to recover maximum dues. With the airline now going to NCLT, the banks will be staring at a huge haircut on their dues.
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