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 InsolvencyResolution Professional (IRP) to make efforts to resolve the matter withinthree months, given it is of national importance.
It has also asked the IRP to submit a fortnightly progressreport in the case and directed to submit the first report on July 5, when thebench would next hear the case.
Under the Insolvency and Bankruptcy Code (IBC), lenders have180 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 liquidationprocess.
The creditors, led by the SBI, approached the NCLT onTuesday under IBC to recover their dues of about Rs 8,500 crore. The banksapproached the bankruptcy court after they found the takeover proposalsreceived from prospective investors – Etihad Airways and Hinduja Group –unimpressive.
They also rejected the conditions put forward by the Gulfcarrier for infusing funds into the defunct carrier.
Besides offering to invest just Rs 1,700 crore against therequirement of Rs 15,000 crore to revive the crisis-hit airline, Etihad had, inits proposal, put the onus of finding a majority buyer on lenders. It alsowanted exemption from giving an open offer.
“The lenders found the conditions unacceptable,” asource told IANS.
Besides Rs 8,500 crore owed to PSU banks, the airline has atotal liability of about Rs 25,000 crore which includes dues of operationalcreditors.
Running out of cash, Jet Airways had suspended its entireoperations on April 17.Subsequently, the government re-allocated theairline’s slots and foreign traffic rights to rival carriers. Shares of thebeleaguered airline declined for 11 straight days, before surging over 90 percent to close at Rs 64 per share on Thursday ahead of the NCLT hearing.