Mumbai, June 20 (IANS) The National Company Law Tribunal (NCLT) on Thursday admitted the State Bank of India’s insolvency plea against the now-grounded Jet Airways.
The Mumbai bench of the tribunal has directed the Insolvency Resolution Professional (IRP) to make efforts to resolve the matter within three months, given it is of national importance.
It has also asked the IRP to submit a fortnightly progress report in the case and directed to submit the first report on July 5, when the bench would next hear the case.
Under the Insolvency and Bankruptcy Code (IBC), lenders have 180 days time with a extension window of 90 days to resolve a stressed account. If a resolution is not achieved in this period, the NCLT can start liquidation process.
The creditors, led by the SBI, approached the NCLT on Tuesday under IBC to recover their dues of about Rs 8,500 crore. The banks approached the bankruptcy court after they found the takeover proposals received from prospective investors – Etihad Airways and Hinduja Group – unimpressive.
They also rejected the conditions put forward by the Gulf carrier for infusing funds into the defunct carrier.
Besides offering to invest just Rs 1,700 crore against the requirement of Rs 15,000 crore to revive the crisis-hit airline, Etihad had, in its proposal, put the onus of finding a majority buyer on lenders. It also wanted exemption from giving an open offer.
“The lenders found the conditions unacceptable,” a source told IANS.
Besides Rs 8,500 crore owed to PSU banks, the airline has a total liability of about Rs 25,000 crore which includes dues of operational creditors.
Running out of cash, Jet Airways had suspended its entire operations on April 17.
Subsequently, the government re-allocated the airline’s slots and foreign traffic rights to rival carriers. Shares of the beleaguered airline declined for 11 straight days, before surging over 90 per cent to close at Rs 64 per share on Thursday ahead of the NCLT hearing.