With no acceptable bids in sight, lenders of the defunct Jet Airways have decided to file insolvency plea before the National Company Law Tribunal (NCLT). This move came after the consortium of lenders led by SBI did not receive acceptable bids from either the Hinduja Group or Etihad Airways.
The lenders will now seek resolution under the Insolvency and Bankruptcy Code. Lenders are likely to join the plea already filed by operational creditors of Jet Airways.
"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. 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,” they said in a statement.
Until now, the lenders were not keen on going down the insolvency route and were looking to maximise the dues they could recover from the defunct airline. However, prospective investors wanted the lenders to take a haircut of over 80%.
Earlier this month, two of the airline’s suppliers — Shaman Wheels and Gaggar Enterprises — moved the National Company Law Tribunal (NCLT) and sought that insolvency proceedings be initiated against the company. NCLT was to hear the matter on June 13. However, no one from Jet Airways showed up after which the matter was adjourned to June 20.
Jet Airways owes Shaman Wheels Rs 6.17 crore, while it owes Gaggar Enterprises Rs 53 lakh. A court-approved notice will be sent to Jet for this hearing and if it fails to show up again, the court may proceed with the matter.
Additionally, multiple reports indicate that the National Aviator's Guild, the body of Jet pilots, is also planning to move the NCLT to initiate insolvency proceedings to recover unpaid salaries.
Jet owes over Rs 8,000 crore to banks and the total liabilities of the airline, including unpaid salaries, is reportedly close to Rs 15,000 crore.
After running out of cash and failing to raise interim loans from banks the airline suspended all operations on April 17, 2019.