The consortium of 26 bankers led by State Bank Tuesday took the grounded Jet Airways to the National Company Law Tribunal to recover their dues of over Rs 8,500 crore. The tribunal will hear the matter Wednesday.
Jet Airways, started over 25 years ago by airline- ticketing-agent-turned-entrepreneur Naresh Goyal, stopped flying on April 17 after it ran out of cash and the unpaid lessors took away most of its 100-odd operational airplanes. The lenders have been trying to sell the airline as a going concern since the past five months, but failed due to many a reason.
Apart from banks, the airline also owes over Rs 10,000 crore to its hundreds of vendors, primarily aircraft lessors and over Rs 3,000 crore to around 23,000 employees who have not been paid since March.
The airline has been having negative networth for long and has run a loss of over Rs 13,000 crore in the past few year. Thus it has over Rs 36,500 crore of dues and being a services company negligible assets to recover.
Also, most of its domestic airport slots have been given away to other airlines by the government and so are some of its slots at some key international airports.
On the aeroplane asset side, Jet had only 16 on its book which are valued around Rs 5,000 crore as per some media reports, as the rest of its 123 fleet were on lease and most of them have been de-registered or taken away by the foreign lessors already.
The Jet shares are at multiyear lows and plunged 41 percent Tuesday to close at Rs 40.45 on the BSE. During the day, it tanked 52.78 percent to hit an all-time low of Rs 32.25. In the past five trading sessions alone, the shares lost over 73 percent of their value.
When banks converted a part of their debt into equity when the stock was trading over Rs 250 apiece. The conversion price was fixed at a nominal Re 1, though.
Following a meeting of the lenders Monday, SBI had said that “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 statement further said the move was necessitated as the prospective investor (a consortium of Etihad Airways and Hinduja group) wants some Sebi exemptions waiving the open offer requirement, which can be worked out better under the bankruptcy laws.
