23 June 2019: The insolvency resolution professional appointed by India’s bankruptcy court for Jet Airways has put the grounded airline’s resolution process on fast track, said two people in the know, following the court’s tight deadline.
Ashish Chhawchharia, partner at Grant Thornton, took charge as RP and met the airline’s management on Saturday to apprise them of the plan ahead.
All power of Jet’s board (currently bereft of any member) and signing powers of all authorized signatories of the airline have been suspended. All communications will be under the RP’s signature or someone delegated by him.
Chhawchharia also implemented a complete moratorium of all claims, proceedings, cases and notices to Jet.
No properties or assets of Jet either in custody or with the airline can be attached by any entity. There was an eviction notice from its office in Siroya Towers. That too has been stopped.
The National Company Law Tribunal (NCLT) Thursday admitted an insolvency plea by Jet’s top lender State Bank of India. In their order, the judges halved the deadline for the resolution process to 90 days from the usual 180 days, saying this was a matter of “national importance”. Jet stopped operations on April 17 running out of money to stay afloat. SBI took it to bankruptcy court over defaults on loan repayments after failing to find the airline a new investor through a bidding process.
Chhawchharia, with five of his associates met 16 of Jet’s executives, led by Nikhil Ved, who heads operations at the airline and Rajesh Prasad, Jet’s chief strategy officer. Jet’s CEO Vinay Dube and its CFO Amit Agarwal have resigned.
The RP will start admitting claims from creditors through newspaper advertisements tomorrow.
The cutoff date for the claims usually is 14 days from the announcement date.
A committee of creditors (CoC) represented by Jet’s lenders will now be formed. It will function like a board of directors, will be chaired by the RP and will vote on various proposals.
The CoC is usually constituted in 30 days but for Jet, it will be fast-tracked to three weeks, said Chhawchharia in the meeting.
The RP will be asking for bids from potential investors. In case a buyer isn’t found in 90 days, the airline will go into liquidation.