On a day the National Company Law Tribunal admitted the insolvency plea of the state-owned State Bank of India, its Chairman Rajnish Kumar said the decision to send Jet Airways to the tribunal was taken as a "last effort to find a resolution" for the debt-ridden private airline. During the SBI's 64th AGM meeting on Thursday, Kumar said: "Taking Jet Airways to the NCLT is the last effort to find a resolution. There are cogent reasons for what the lenders are doing. Every decision has been taken after a lot of due deliberations."
Not ruling out from the possibility of liquidation, Kumar said that Jet Airways was the first airline to be sent to the NCLT. "We will have to see how does it proceed and what legal principle gets laid out," he added. The bankruptcy tribunal said the Jet Airways case was of "national importance" and ordered a resolution as per the provisions of the Insolvency and Bankruptcy Act within 90 days.
The SBI had filed an insolvency petition against Jet Airways before the Mumbai bench of NCLT on Tuesday earlier this week. The bank had also recommended Ashish Chhawchharia of Grant Thornton as Interim Resolution Professional (IRP). Now the NCLT has asked the IRP to take control of the carrier's assets. The tribunal also asked the IRP to submit a status report on the resolution process every fortnight. The first status report is to be submitted on July 5, 2019.
Jet Airways had stopped operations on April 17 after lenders refused funds required to keep the airline afloat. The banks have been trying to salvage the company ever since. The SBI-led consortium of banks that had extended loans to Jet Airways agreed to file insolvency proceedings against the airline after the bank-led resolution process failed to get any results. The consortium had been in control of the company's board since March after the exit of its founder Naresh Goyal.
Jet airways stock, which rose 93.5% on BSE and 122% of NSE on June 20 before the NCLT hearing at 5pm (after market hours), started falling again on Friday. The stock has fallen around 20% today to Rs 52.
Edited by Manoj Sharma
Jet Airways eroded investor wealth worth Rs 9,430 crore in 18 months