NCLT’s Mumbai bench will hear the grounded airline’s bankruptcy case for the first time on Wednesday
With Jet in NCLT, the lenders face the possibility of recovering a fraction of their dues worth ₹8,400 crore
Lenders to Jet Airways (India) Ltd have named Ashish Chhawchharia of Grant Thornton India as the resolution professional (RP) for the airline’s bankruptcy proceedings, three people aware of the matter said. Law firm Cyril Amarchand Mangaldas will represent the interests of the lenders’ consortium.
The consortium led by State Bank of India (SBI) on Monday decided to start insolvency proceedings against the debt-laden airline which last flew on 17 April.
Chhawchharia is partner and head of restructuring services at Grant Thornton, according to his LinkedIn profile, which also states that he is an Insolvency Professional registered with the Insolvency and Bankruptcy Board of India (IBBI).
Spokespersons at Grant Thornton and Cyril Amarchand Mangaldas declined to comment.
The case will be heard by the Mumbai bench of the National Company Law Tribunal (NCLT) for the first time on Wednesday.
“The petition for insolvency was filed on Tuesday morning and would be mentioned for an early hearing on Wednesday," said the first of the three persons cited above, all of whom spoke on the condition of anonymity. Grant Thornton will assist the RP in finding a prospective buyer for Jet Airways and recover dues for the lenders, this person added.
Last week, two operational creditors of the airline—Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt. Ltd—filed separate insolvency pleas against Jet Airways to recover their dues. The NCLT is expected to hear their pleas next week.
Meanwhile, Jet Airways pilots’ union National Aviator’s Guild also plans to file an insolvency plea for non-payment of salaries and for not providing for gratuity.
“The airline (Jet Airways) currently has no assets and operations to speak of, so finding a buyer is a tall task. And if a buyer comes in, he will demand a huge haircut. The only assured asset that can fetch some money is the brand, but this may not fetch huge value," said the second person cited above.
“There are a couple of foreign airlines we are looking at who could potentially revive the airline, but for now, it appears to be a tall task," said this person, who is directly involved in the matter.
A senior official at a public sector bank involved in the discussions, said about two parties have shown interest in bidding once the company is in the bankruptcy court.
“These parties haven’t given us any assurances yet," the senior banker said without elaborating.
Meanwhile, two independent directors of Jet Airways—former bureaucrat Ashok Chawla and Sharad Sharma—resigned from their positions on Tuesday as the airline’s board is non-compliant with provisions of the Companies Act and as the bank-led resolution plan is not moving forward.
Lenders led by SBI have been trying to resolve the insolvency crisis at Jet outside the NCLT due to fear of little or no recovery.
With the company in NCLT, the lenders face the possibility of recovering a fraction of their dues worth ₹8,400 crore. Jet’s total liabilities, including unpaid salaries and vendor dues, are nearly ₹15,000 crore. The carrier grounded flights in April due to a severe cash crunch.
“I feel sad and deeply distressed mainly for our loyal employees who have waited months and were anxiously and hopefully awaiting a positive outcome to the Bank Led Resolution Plan," the airline’s founder Naresh Goyal said in a statement on Tuesday.
“I can only hope and pray that even now, a solution can emerge and Jet can fly and fulfil the needs not only of employees but of air travellers who feel the absence of the Joy of Flying," Goyal added.