Jet Airways stock is suddenly up by 5%, even though the company has been shut for six months now
- As of Thursday afternoon, its share prices saw an uptick of 5% to ₹22.60.
Jet Airwaysis the first company to undergo Cross Border Insolvency Protocol.
- In April 2019, the company had decided to suspend all flights grounding over 110 aircrafts.
The uptick in its shares came in right after the announcement came in on October 18 that the company would be the first to undergo insolvency proceedings under the Cross Border Insolvency Protocol along with the Insolvency and Bankruptcy Code (IBC) of India.
The debt-ridden Jet Airways is also facing insolvency proceedings in The Netherlands too. It was declared bankrupt in the country after it failed to pay two European creditors. The Dutch court subsequently appointed a bankruptcy administrator, reported IANS.
While the reason for the jump in share price can’t be determined, regulatory lawyer Sumit Agarwal said that there is absolutely no bar for someone to sell or buy the stock even when the company is in insolvency.
“Equity shareholder can always buy or sell the stock on the stock exchange. The entire purpose of listing itself is to get the value of the company. There maybe some shareholders who believe that the company is before the NCLT and under the resolution plan, that will be far better than the management. While some may feel that the company is going down, they will sell the shares,” said Agarwal.
The bankrupt airline has also been struggling to find a buyer. In April 2019, the company had decided to suspend all flights grounding over 110 aircrafts.