NCLT admits insolvency plea against Jet Airways, posts matter for next hearing on 5 July; RP directed to finish process in three months

The bankruptcy court, National Company Law Tribunal (NCLT), on Thursday, decided to admit an insolvency petition against Jet Airways Ltd filed by its creditors in an attempt to salvage some of their ownership.

The insolvency process will allow lenders led by State Bank of India to sell the company as a whole or sell its assets and bring to end weeks of uncertainty over the airline’s future.

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NCLT has listed the matter on 5 July for the next hearing. The tribunal declared a moratorium on the recovery of dues from Jet Airways.

The pilots and engineers unions of Jet Airways and two Dutch logistics vendors to the grounded airline on Wednesday moved the NCLT seeking them to be made parties to the bankruptcy hearings.

The consortium of 26 bankers led by State Bank had filed for bankruptcy Tuesday at the Mumbai bench of the NCLT, seeking to recover over Rs 8,500 crore of their funds from the airline that was formally grounded on 17 April.

While the pilots and engineers unions wanted to be made party to the case, the representatives of two Dutch firms wanted the tribunal's nod to make an intervention petition.

It can be noted that two logistics vendors of Jet in the Netherlands had confiscated a passenger jet at the Amsterdam airport late March seeking dues and a local court had in May ordered bankruptcy process against the grounded airline and had appointed Rocco Mulder as the administrator for the bankruptcy proceedings.

Representative image. Reuters

Jet Airways owes over Rs 3,000 crore to its 23,000 employees who have not been paid since March and some of them like engineers and pilots were getting part salaries since last December. The company also owes over Rs 10,000 crore to aircraft vendors/lessors.

The lenders reportedly picked Ashish Chhawchharia of Grant Thornton India as the resolution professional (RP) for the airline's bankruptcy proceedings. Law firm Cyril Amarchand Mangaldas is the legal advisor to the SBI-led consortium for the Insolvency and Bankruptcy Code (IBC) proceedings.

Meanwhile, shares of Jet Airways witnessed an unprecedented rally on the bourses Thursday, bouncing back sharply after days of massive fall to close the day over 122 percent higher.

After a highly volatile trading day, the scrip skyrocketed 93.35 percent to close at Rs 64 on the BSE, helped by robust fag end buying. During the day, it zoomed 133.68 per cent to Rs 77.35.

Earlier in the day, shares of the company had touched its all-time low of Rs 27, down 18.42 percent. At the NSE, shares rose by 122.20 percent to close at Rs 73.55. In intra-day trade, it touched a high of Rs 82.75 and an all-time low of Rs 26.55.

With agency inputs