The National Company Law Tribunal passed an order in favour of admitting Jet Airways for insolvency, following a plea filed by a consortium of lenders led by the State Bank of India. This came after lenders did not receive any bids that they could accept. The court dismissed the petitions filed by operational creditors.
The NCLT declared a moratorium under the Insolvency and Bankruptcy Code. It further directed the interim resolution professional (IRP) to take control of the defunct airlines’ assets and submit its first report on July 5, and fortnightly reports without delay.
The NCLT directed the IRP to try and complete the resolution process within three months as the matter is of national importance and involves a huge workforce and many aircraft.
Earlier this month, Shaman Wheels and Gaggar Enterprises, operational creditors of Jet, moved the NCLT and sought for insolvency proceedings to 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 Thursday. Jet Airways owes Shaman Wheels Rs 6.17 crore, while it owes Gaggar Enterprises Rs 53 lakh.
Jet Airways saw one of the worst days of its trading history on Tuesday, when investors distanced themselves from the grounded airline after lenders decided to initiate bankruptcy proceedings. After tanking over 40% earlier this week, the stock surprisingly saw a bounce back of 122% on Thursday, even before NCLT pronounced its order.
The company also informed about the resignation of two independent directors -- Ashok Chawla and Sharad Sharma — in another sign that the chances of its revival were remote.
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.