18 June 2019: State Bank of India (SBI), the lead banker to Jet Airways, on Tuesday filed an insolvency plea against the crisis-hit airline under Section 7 of the Insolvency and Bankruptcy Code at the National Company Law Tribunal (NCLT), Mumbai.
The tribunal will hear the plea on June 19. Ashish Chhawchharia of advisory firm Grant Thornton has been selected interim resolution professional by the SBI and one of the first tasks before him would be to gather details of the airline’s assets, aircraft, and employees on the rolls. The interim resolution professional would need to find out ownership and lease details of the planes and this would have to take place along with inviting claims from creditors, a source said.
An interim resolution professional is appointed for a period not exceeding 30 days. The committee of creditors in its meeting will decide on continuing with the interim resolution professional or appointing a new one. Law firm Cyril Amarchand Mangaldas is representing SBI in the insolvency plea.
Interestingly, Jet Airways has been declared bankrupt by a local court in the Netherlands last month on application made by two transport services providers. The Holland District Court has appointed Rocco Mulder as the administrator in the bankruptcy proceedings of Jet Airways.
Mulder told Business Standard that he will take part in the insolvency proceedings against Jet Airways in Mumbai through his lawyer Sumant Batra. “Two creditors secured the order against Jet Airways, but there are many other companies which have not been paid by Jet Airways,” said Mulder.
Mulder added that under Dutch law the opening of insolvency proceedings in the Netherlands has universal effect. However, local laws of other countries will be decisive with regard to the enforceability of the Dutch court order.
“We understand that the Dutch court order cannot be enforced automatically in India. Our objective now is to gather more details and see that the airline’s assets are protected. Till now the situation has been unclear. There was no revival and no management in charge to respond to our concerns,” he said.
Meanwhile, the National Aviators Guild representing the pilots of the grounded airlines have served a demand notice to Jet Airways demanding payment of unpaid dues to the pilots failing which they have threatened to join insolvency proceedings against the airline.
Unable to find a taker after months of negotiations, the consortium of lenders led by the SBI finally decided on Monday to take the grounded airline to the bankruptcy court for resolution. Jet Airways is sitting on a debtpile of Rs 8,500 crore, with the SBI having the maximum exposure followed by another state-owned lender Punjab National Bank.
Meanwhile, the two operational creditors of Jet Airways — Shaman Wheels and Gaggar Enterprises — had earlier moved the NCLT. The tribunal has posted the matter for June 20. Jet airways owes over Rs 6 crore to Shaman Wheels and Rs 53 lakh to Gaggar Enterprises.
Jet airways has been grounded since April 17. Although it was initially termed a temporary grounding, it never flew again.
Shares of the grounded airline nosedived 40.8 per cent on Tuesday to Rs 40.45.