31 C
New Delhi
Saturday 19 October 2019
Economy Business Jet Airways sent to bankruptcy court; banks abandon revival...

Jet Airways sent to bankruptcy court; banks abandon revival attempt

The lenders wanted a settlement of the Jet Airways case outside the IBC but it will be settled under the law the Narendra Modi government had introduced during its previous term

-

- Advertisment -

Mumbai: The consortium of lending banks led by the State Bank of India (SBI) has abandoned its efforts to re-establish the private sector Jet Airways (India) Ltd. The group of banks has decided to send the case to the National Companies Law Tribunal (NCLT) for action under the bankruptcy code to resolve the debt trap in which the airline finds itself. Banks have to recover Rs 8,000 crore from the airline.

Jet Airways was once the largest private airline in the country. Twenty-five years ago, Naresh Goyal, then a ticketing agent, had started this airline as an entrepreneur.

Even as the banks made efforts to revive the airline, no substantial proposal was received from any unit for the revival of Jet Airways that is immersed in debt. Although the Etihad-Hinduja alliance showed interest in the airline, no substantial proposal was received from it. The decision to send the airline’s case to NCLT was hence taken at the meeting of the banks on Monday.

This decision has been taken after reports that federal law enforcement agencies are monitoring the activities of Goyal. They are going to start a money-laundering investigation against him.

Jet Airways’ operations closed on 17 April. It has not paid salaries of 23,000 employees of the airline for several months. It has but increased its average airfare by 40%.

The government has given the airline’s slots at domestic airports to other aviation companies. Some of the slots at international airports have been given to other airlines.

The SBI said in a statement that, after intensive consultation, the lenders have decided that the issue of Jet Airways will be settled under the Insolvency and Bankruptcy Code (IBC).

The statement said that this move was necessary because the potential investors want some relaxation by SEBI for the deal. This kind of a deal can be handled better under the IBC.

The bank said that the lenders wanted a settlement of the case outside the IBC but now the decision has been taken to settle it under the law that the Narendra Modi government introduced during its previous term.

It is to be noted that two firms lending money to Jet Airways commercially, Shaman Wheels and Gaggar Enterprises, had appealed to the NCLT on 10 June to start the bankruptcy process against the airline. The tribunal has not yet filed these petitions for hearing. The tribunal had said on 13 June that it would look into the matter on 20 June.

The NCLT has asked the concerned parties to send a legal notice to Jet Airways.

Jet Airways owes Rs 8.74 crore to Shaman Wheels and Rs 53 crore to Gaggar Enterprises.

The airline owes more than Rs 8,000 crore to the SBI-led banks, too. Right now, the banks are running the airline financially. The total loss of Jet Airways stands at Rs 13,000 crore. The airline owes Rs 10,000 crore to the providers of goods and services while it owes Rs 3,000 crore towards the salary of its employees.

Subscribe to our newsletter

You will get all our latest news and articles via email when you subscribe

The email despatches will be non-commercial in nature
Disputes, if any, subject to jurisdiction in New Delhi

Leave a Reply

Opinion

Karva Chauth: Faith, legend behind viewing the moon through a sieve

The legend and Karva Chauth rituals vary across Rajasthan, Uttar Pradesh, Himachal Pradesh, Madhya Pradesh, Haryana, Punjab, Delhi and, in south India, Andhra Pradesh

Pakistan-Occupied Kashmir, Here We Come!

Study Wuhan and Mamallapuram in the backdrop of the fact that things are not quite working out in China-Pakistan economic relations, notwithstanding the urge of the communist state to contain India and that of the Islamic state to challenge it

Slowdown Has Reasons Other Than GST, Demonetisation

When all economic sectors decline, the mood of the market turns sombre, turning investors all the more reluctant to pump in money; the interdependence of industries means that the slowdown suffered by one would affect many

Where China & India, Resisting & Improving Democracy, Meet

What you see in Hong Kong is China resisting democracy; what you see in Kashmir is India promoting it; a reasonably capitalist China does not offer freedom politically but India, held back at times by the choice of the people, is still opening up; there could be a point of convergence as the two nations move in opposite directions

Omega-3: Study published in BMJ claiming no benefit for type 2 diabetes has myopic vision

Most respondents in the omega-3 study published in the BMJ are from Europe and North America; such results can hardly be applied worldwide
- Advertisement -

Elsewhere

Pakistan under Indian pressure freezes terrorists’ accounts

The global community is crediting Indian diplomacy at the FATF via Asia Pacific Group with forcing Pakistan to take this action under the 4th Schedule of its Anti-Terrorism Act

Delhi police stations may come under Islamist suicide attack

Tight security arrangements have been made in about 200 police stations of Delhi; people visiting police stations are being closely monitored

Mexico deports 311 Indians trying to infiltrate into US

One of those deported from Mexico narrated how dead bodies of others who had tried to sneak into the US were strewn around in a Panama forest

CCTV camera catches killers of Kamlesh Tiwari

Police began scrutiny of footage from CCTV cameras in the neighbourhood soon after the murder of Kamlesh Tiwari; the killers have been traced but not yet identified

ISIS emerges as most probable killer of Kamlesh Tiwari

The assailants who came to kill Kamlesh Tiwari were carrying two kinds of weapons, a knife and a gun, but they did not shoot and kill him

You might also likeRELATED
Recommended to you

%d bloggers like this: