Jet Airways crisis: NCLT admits SBI's insolvency plea, orders resolution in three months
BusinessToday.In June 20, 2019
The National Company Law Tribunal (NCLT) has admitted the insolvency plea by State Bank of India against Jet Airways on Thursday. The bankruptcy tribunal said the matter was of "national importance" and ordered a resolution as per the provisions of the Insolvency and Bankruptcy Act within three months.
The SBI had filed an insolvency petition against Jet Airways before the Mumbai bench of NCLT on Tuesday earlier this week. The bank had also recommended Ashish Chhawchharia of Grant Thornton as Interim Resolution Professional (IRP).
Admitting the plea against Jet Airways, the NCLT asked the IRP take control of the carrier's assets. The tribunal also asked the IRP to submit a status report on the resolution process every fortnight. The first status report is to be submitted on July 5, 2019.
Jet Airways had stopped operations in April earlier this year after lenders refused funds required to keep the airline afloat. The banks have been trying to salvage the company ever since.
The SBI-led consortium of banks that had extended loans to Jet Airways agreed to file insolvency proceedings against the airline after the bank-led resolution process failed to get any results. The consortium had been in control of the company's board since March after the exit of founder Naresh Goyal.
The bank had enlisted Etihad Airways to take over the airline's revival after a bidding process. The UAE-based airline, which had been a stakeholder in Jet Airways, had refused to become a majority shareholder in the embattled airline. It tried to rope in the Hinduja group to help set Jet Airways on the path of recovery. The UK-based company, however, baulked in the face of mounting problems at the troubled Indian carrier. The Etihad-Hinduja combine also wanted the banks to take a huge haircut on their outstanding dues, which did not sit well with the creditors.
Meanwhile, after the annual general meeting of SBI on Thursday, bank's chairman Rajnish Kumar said that the decision to take Jet Airways to the NCLT had to be taken.