Grounded airline Jet Airways on Sunday said that insolvency proceedings have been initiated against it as per the provisions of the Insolvency and Bankruptcy Code, 2016. The carrier had, owing to acute financial crunch, stopped flying on April 17 and its lenders, after an extensive search for investors, voted for bankruptcy earlier this month.
“Pursuant to an Order dated 20 June 2019 of the National Company Law Tribunal, Mumbai Bench, Corporate Insolvency Resolution Process (“CIRP”) has been initiated for Jet Airways (India) Limited (“Company” or “Corporate Debtor”) as per the provisions of the Insolvency and Bankruptcy Code, 2016,” Jet said in a filing.
It further said that upon initiation of CIRP, the powers of the Board of Directors of the company has been suspended and shall be exercised by the Interim Resolution Professional.
The debt-ridden company became the first domestic airline to go into bankruptcy after the Mumbai bench of the NCLT admitted a petition filed by SBI on behalf of 26 lenders on June 20.
The bench has set a 90-day deadline to resolution professional Ashish Chhauchharia of Grant Thornton to conclude the resolution process, even though the bankruptcy law allows 180 days for the same, saying “the matter is of national importance.”
It also asked the resolution professional to file fortnightly progress report and submit the first such report on July 5, when it will begin to hear the matter again.
The Mumbai-based airline owes around Rs 8,500 crores to banks, and thousands of crores more in arrears to vendors, lessors and employees. The airline formally stopped flying on April 17 and banks voted for bankruptcy on June 17.
Last week, SBI chairman Rajnish Kumar, after the annual general meeting, said the decision to send Jet Airways to the tribunal was taken as a “last effort to find a resolution”.