Creditors’ panel approves $10 mn interim fund for Jet Airways
1 min read 19 Jul 2019, 07:13 PM ISTThe interim funding of about ₹69 crore will be used for the corporate insolvency resolution processThe funds will be used to hire people on contracts to verify claims made by different creditors
PremiumMUMBAI : he Committee of Creditors (CoC) of Jet Airways (India) Ltd on Friday approved an interim funding of $10 million (about ₹69 crore) for the airline, which will be used for the corporate insolvency resolution process, two people with direct knowledge of the matter said, requesting anonymity.
During the past two days, the airline’s CoC, led by the State Bank of India (SBI), also voted on other resolutions, including calling for bids for bankrupt Jet Airways’ asset sale and admission of claims by creditors.
“The CoC has today voted in favour of a $10 million interim debt infusion by bankers, which will help start the insolvency resolution process," said the first person.
“$10 million will be used to hire people on contracts to verify claims made by different creditors of the airline," said the second person.
Jet Airways was grounded on 18 April.
On 20 June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted Jet Airways under the Insolvency and Bankruptcy Code (IBC) after lenders referred it to the bankruptcy tribunal.
“The CoC has also decided to allow bids (for Jet Airways) from investors with a minimum net worth of ₹1,000 crore," the first person said, adding that advertisement seeking expressions of interest (EoI) will be published within a couple of days.
“The decision was taken so that frivolous bidders stay away from the process," the person added.
On 18 July, the resolution professional (RP) appointed by lenders said that the financial creditors who have the first right to proceeds from Jet Airways’ bankruptcy resolution, have claimed ₹10,231 crore, while 2,400 operational creditors have claimed ₹12,372 crore.
The RP of Jet Airways said out of the ₹24,887 crore, it has admitted claims of ₹8,462.79 crore from the financial creditors.
Claims of about ₹15,044 crore are under verification, while those of ₹1,380.82 crore were rejected.
The steep claims push the airline closer to liquidation.
A consortium of 26 bankers, led by the State Bank of India, had approached the tribunal to recover dues of over ₹8,500 crore.
The lenders had been trying to sell the beleaguered airline as a going concern for the past five months.
The National Company Law Tribunal will hear the insolvency case and the progress report by the insolvency resolution professional on 23 July.
Gopika Gopakumar contributed to the story.
