5 June 2019: Uncertainty seldom has a positive streak. But it’s doing exactly that for the grounded Jet Airways, which may ward off insolvency proceedings due to ambiguity surrounding the revised stressed assets restructuring framework.
According to the bank-led resolution plan, Jet Airways will be past its sell-by date this month. However, lenders seem to be in no hurry to consider insolvency proceedings in the absence of a time-bound resolution framework. “There’s no time frame, though we want it as fast as possible… NCLT is always an option. Bankers will consider all options to maximise recoveries whether it takes six or nine months or if we should go to NCLT,” a senior banker told Express.
It may be noted that SBI chairman Rajnish Kumar in March sounded confident of finding a buyer or an investor by the end of May, much before the 180-day deadline was to lapse in June.
In fact, the resolution process itself was initiated based on the RBI’s controversial February 12 circular, which mandates lenders to implement a plan within 180 days of first default (in Jet’s case default occurred in December quarter). The SBI-led consortium opted for a creditor-in-saddle approach to convert debt into equity, besides opening up doors for a strategic investor or promoter. But as it nears the 180-day deadline, a revival plan remains elusive for the airline.
As per the circular, which the Supreme Court ruled ultra vires, lenders have to refer all accounts with over Rs 2,000 crore loans to the NCLT if they fail to implement a resolution plan within 180 days of default. An insolvency application under the Insolvency and Bankruptcy Code 2016 must be filed within 15 days of completion of the deadline.
Though reports of Hinduja Group evincing interest emerged last month, sources said no formal proposal was submitted yet.“The February 12 circular was the basic framework based on which the revival package was set in motion. But there should be somebody who should come to the table, only then the financial structure can be discussed and implemented,” he explained, perhaps reflecting on the lackluster response from potential bidders.He said the SFIO probe on Jet’s books and its erstwhile promoters Naresh Goyal won’t hamper their search for an investor.