Jet Airways is headed to bankruptcy court as bankers fail to find a buyer
- Lenders of grounded
Jet Airwaysdecide to take the defunct airline to bankruptcy court
- The process to find a buyer failed as there was only one bid and that too was, a conditional one.
- The stock of Jet Airways fell 18% on Tuesday to a new all-time low
- The hearing at insolvency court is expected to be held on June 20
AdvertisementJet Airways’ lenders have given up hope of saving it from bankruptcy, as they have moved the matter to Insolvency and Bankruptcy Court (IBC).
“After due deliberations, lenders have decided to seek resolution under IBC since only a conditional bid was received and requirement of the investor for SEBI exemptions and resolution of all creditors is possible under IBC,” said a statement by lenders of Jet Airways, after a meeting today.
It means that a sale process can be still be carried on under the auspices of IBC. Lenders led by State Bank of India (SBI) have been taking efforts to find a resolution for Jet Airways outside IBC. But considering the joint bid by the Hindujas and one of Jet’s existing investors, Etihad, fizzled out, they have decided to move it to IBC.
Stock price crash
In anticipation of such a move, the stock of Jet had crashed in trade today. The stock lost over 17% on Monday as the lenders had met and made a last-ditch attempt and discuss options to keep it away from bankrupcy.
The airline stalled operations on April 17 after the State Bank of India (SBI) refused to extend an additional loan. It has an outstanding loan of around ₹85 billion which it owes to a clutch of lenders.
The hearing at insolvency court is expected to be held on June 20 after an appeal by two of its creditors, Shaman Wheels and Gagar Enterprises, to recover their dues.
In spite of being the country’s second largest carrier before the ongoing crisis, the airline came under financial stress due to untoward expansion plans leading to debt, coupled with increase in fuel and other operational costs.
Saving private Jet
Lenders had been known to try various methods like giving an ultimatum to possible bidders like Hindujas and Etihad to close a deal. These talks were known to hit a roadblock after business group Hindujas reportedly sought tough conditions for investment.
Yet another option was to sell the ‘Jet Airways’ brand to an interested investor. Another plan up the sleeve of the lenders was to take a substantial haircut on their loan, is to pay up and take charge of Jet’s aircraft. This plan was however low on their agenda for the lenders had been hoping that the shuttered company does not go down, taking their money with it.
Indian airlines have more empty seats these days but their profits are soaring like never before-- and no one seems to care
Popular on BI
- How OnlyFans star Riley Reid plans to 'immortalize' herself using AI
- A leading supplement researcher says she doesn't take any — because she's getting what she needs from her vegan diet
- Mattel rolled out a Barbie to honor a late Cherokee Nation chief with a language error on the box that says 'chicken' instead of 'Cherokee'
- India’s economic rise: How global tech giants are chasing the next big growth engine
- Lamborghini Revuelto: Plug-in hybrid supercar with V12 engine hits Indian roads
- 10 Lesser-known destinations to visit in India in December
- Christian Louboutin Announces a Joint Venture Partnership in India with Aditya Birla Fashion and Retail Limited
- ICC Rankings: Ravi Bishnoi becomes world's No.1 T20I bowler