17 June 2019: Jet Airways’ lenders, led by the State Bank of India (SBI), have decided to initiate bankruptcy proceedings against the cash-strapped airline, sources told CNBC-TV18.
The lenders met Monday to decide on the course of action on the airline which flew operated its last flight in April before shutting down operations after failing to secure emergency funding to keep afloat.
The domestic carrier has since been looking for investors to resume operations but nothing has materialized so far. Eithad Airways, which was a minority Jet stakeholder under Naresh Goyal’s ownership, was in talks with Hinduja Group for a bid but it didn’t materialise.
The lenders rejected concessions sought by Etihad Airways on pricing and open offer as they were found to be non-compliant with the market regulator Securities and Exchange Board of India (Sebi) norms.
The SBI-led consortium is expected to file insolvency proceedings against the airline later this week.
The National Company Law Tribunal (NCLT) filing for Jet Airways is expected to take place before the next hearing.
The SBI-led lenders will attempt a sale of the debt-stricken airline to a new owner under the Insolvency and Bankruptcy Code (IBC) in a last ditch attempt to save the carrier, sources told CNBC-TV18.
In a statement, Jet Airways confirmed the developments at the lenders’ meeting.
“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,” the statement said.
It continued: “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.”