New Delhi: Two months after the beleaguered Jet Airways shut all its operations, its lenders, led by State Bank of India (SBI), on Monday decided to move to the National Company Law Tribunal (NCLT) to begin insolvency proceedings following several failed attempts to rescue the grounded airways. The decision was taken after the lender met on Monday.
CNBC TV18 reported that SBI, which has the highest exposure of about Rs 2,000 crore in Jet, led the consortium of lenders including Punjab National Bank (PNB), with an exposure of about Rs 1,700 crore, to move NCLT within two days. These lenders will now join the two operational creditors of Jet, Shaman Wheels and Gaggar Enterprises, whose plea will go for hearing on June 20, 2019 at the Tribunal.
This leaves the grounded airlines with one last chance for revival to find buyers through NCLT proceedings.
On the other side, several investigative agencies are probing to ascertain if Jet had indulged in any financial irregularities. The Prime Minister Office (PMO) on Monday called for a review meeting in this matter and asked the revenue department to assess its tax dues. Besides summoning Jet founder Naresh Goyal, the Income Tax department is probing possible tax violations by Jet Airways. Separately, the Ministry of Corporate Affairs has ordered a probe into the books of the airline after the Registrar of Companies found instances of violation of the Companies Act by the airline. Alongside, the Enforcement Directorate (ED) is trying to ascertain if certain Foreign Direct Investment (FDI) norms were violated by the airlines.
As per media reports, Jet has accumulated a debt of nearly Rs 8,500 crore on its books with total liabilities of around Rs 25,000 crore.
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In April, when SBI Capital Markets (appointed as the investment banker by the consortium of financial creditors) invited bids for claiming stakes in Jet, bids came from Etihad Airways, two private equity players TPG Capital and Indigo Partners, NIIF and Hinduja Group, but all of them retracted in the final bidding leaving the lenders in limbo.
As per the initial resolution plan worked out by the lenders, the airline was to issue 114 million shares to the lenders at Rs 1 increasing their stake to 50.1 per cent in the company, while the stakes of promoter Naresh Goyal and Etihad Airways would fall by half to 25 per cent and 12 per cent, respectively. Besides, the lenders also agreed to provide interim funding of Rs 1,500 crore. This plan prompted Naresh Goyal and his family members to quit the board in March.