Mumbai: A consortium of banks led by the State Bank of India (SBI) has referred the debt-laden Jet Airways to the National Company Law Tribunal (NCLT) for bankruptcy proceedings after negotiations with Etihad Airways and Hinduja Group did not fructify.
A petition has already been filed with the NCLT’s Mumbai bench, a source told FC.
The decision was taken after a meeting of the lenders, as they have not yet received any concrete proposal for the airline.
"After due deliberations, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received," the SBI said in a statement.
It further said the move was necessitated, as the prospective investor wanted some Sebi exemption on the deal, which could be worked out better under the Insol-vency and Bankruptcy Code (IBC).
Etihad and the Hinduja Group, the two interested bidders, were demanding over 85 per cent haircut on Jet Airways' debt, which was unacceptable to lenders, according to media reports. Etihad was seeking open offer exemption and pricing concessions, which were rejected by the banks as they were found to be non-compliant with the Securities and Exchange Board of India (Sebi) norms. Lenders are hoping the bankruptcy co-urts can decide on pricing and open offer exemptions sought by Etihad and this could attract new bidders.
The bank said lenders have been taking efforts to find a resolution for the grounded carrier outside the IBC, but have now decided to seek a resolution within the IBC.
It can be noted that on June 10, two operational creditors—Shaman Wheels and Gaggar Enterprises—had moved the NCLT seeking bankruptcy proceedings against the airline and on June 13 the tribunal, which is yet to admit the petitions, put off the matter for hearing to June 20.
The airline, which was grounded on April 17, owes Rs 8.74 crore to Shaman Wheels and Rs 53 lakh to Gaggar.
Jet Air owes Rs 8,400 crore to the consortium of banks, which now runs the airline, while it has a much larger debt pile of accumulated losses of Rs 13,000 crore, besides vendor dues of over Rs 10,000 crore and salary dues of over Rs 3,000 crore....