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NCLT directs Jet Airways' creditors to release interim funding in 15 days

Jet Airways has been grounded since 18 April, due to an acute fund crunch. (Photo: Mint)Premium
Jet Airways has been grounded since 18 April, due to an acute fund crunch. (Photo: Mint)

  • The proceeds will be utilized for aircraft maintenance, to pay staff processing claims made by various creditors of the grounded airline, said the report
  • A consortium of 26 bankers had earlier approached the tribunal in June to recover dues of over 8,500 crore from the grounded airline

New Delhi: The Mumbai bench of National Company Law Tribunal (NCLT) on Wednesday directed the Committee of Creditors (CoC) of Jet Airways (India) Ltd to disburse interim funding within the next 15 days, the proceeds from which will be utilized for aircraft maintenance and to pay staff processing claims made by various creditors of the grounded airline, a person with direct knowledge of the matter told Mint.

"The NCLT has given CoC another 15 days to make the payout," the person said requesting anonymity.

As things stand, only the State Bank of India (SBI), which has the highest exposure towards Jet Airway's debt, has made a payout of about 10 crore for interim funding, while other lenders are yet to make their contribution, the person added.

A consortium of 26 bankers, led by the SBI, had earlier approached the tribunal in June to recover dues of over 8,500 crore from the grounded airline. The lenders had been trying to sell the beleaguered airline as a going concern for the past few months.

Meanwhile, the CoC had on 19 July approved the interim funding of $10 million (about 71 crore according to Wednesday's exchange rate) for hiring people on contracts to verify claims made by different creditors of the airline and for maintenance of aircraft.

Jet Airways has been grounded since 18 April, due to an acute fund crunch.

The airline currently has liabilities over 30,000 crore, including over 10,000 crore in vendor dues, 8,500 crore along with interest owed to lenders, over 3,000 crore in salary dues, and more than 13,500 crore in accumulated losses over the past three years.

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