Taking up the matter as one of national priority, the Mumbai bench of the National Company law Tribunal (NCLT) has set in motion the process to expeditiously find a solution for revival of Jet Airways.
Share price surges
Even as the hearing was on, the company’s share price, surged over 150% intra-day to finally close at ₹64 with a gain of 93.35%.
“It appears to be a speculative play and should be probed so that no manipulation takes place,” said Deven Choksey, MD & CEO, KR Choksey Shares and Securities. The NCLT on Thursday admitted the insolvency proceedings against Jet Airways following a petition filed by the State Bank of India (SBI)-led lenders to recover their dues amounting to approximately ₹8,000 crore.
The bench of NCLT members V.P. Singh and Ravikumar Duraisamy appointed Ashish Chhawchharia, partner at Grand Thorton, as the interim resolution professional (IRP).
“The order has been passed admitting the Section 7 IBC application of SBI, and the court has ordered a moratorium on all other proceedings,” said Rahul Kamerkar, a lawyer for the engineers of Jet Airways who have also moved the NCLT.
“The IRP has been asked to take over all assets of Jet Airways immediately and directed to file his resolution plan within 3 months considering the number of workers and the fact that the case is of national importance,” Mr. Kamerkar said.
Mr. Chhawchharia has been directed to submit his preliminary report by July 5, 2019, wherein he will have to provide details of all the assets of the company, etc.
The IRP will soon issue a public notice inviting claims from affected parties and creditors. While JAMEWA, the engineers’ union, and about 72 senior managers will individually submit their claims through their legal counsel Mr. Kamerkar, the pilots union — National Aviators Guild (NAG) — will do it through their counsel Jane Cox.
The petition of other two Dutch logistics firms, namely Shaman Wheels Pvt. Ltd. and Gaggar Enterprises, has been dismissed and they have been asked to file their claims in the proceedings.
Jet Airways, which has reportedly been declared bankrupt by a local court in the Netherlands following the applications by two service providers — H. Essers Finance Company and Wallenborn Transports — with claims of unpaid bills worth ₹280 crore from the airline, got relief from the NCLT.
The NCLT dismissed their plea on the grounds that Jet Airways is a company registered in India. NCLT member V.K. Singh said, “The Netherlands does not have any jurisdiction on Jet Airways as it is a Mumbai-based company and there is no provision for cross border relations.”
Representing the pilots union, Ms. Cox said some entity must acquire Jet Airways so that the pilots could get their jobs back. “If a moratorium will come into effect then nobody will deal with the asset. We want somebody to buy the company because we want employment as the pilots haven't been paid since January,” she said.
