A consortium of creditors led by State Bank of India has given up its hopes to revive Jet Airways (Mumbai International) and will file a formal bankruptcy claim at the National Company Law Tribunal (NCLT), The Economic Times has reported.
"Lenders have decided to seek resolution under Insolvency and Bankruptcy Code since only a conditional bid was received and requirement of the Investor for SEBI exemptions and resolution of all creditors is possible under IBC. Lenders led by State Bank of India have been taking efforts to find a resolution for Jet Airways outside IBC but in view of the above, lenders have decided to seek a resolution within the IBC process," SBI said in a statement.
The only highly conditional bid was placed by Etihad Airways (EY, Abu Dhabi International). The airline expected the creditors to take an 85% haircut from the INR85 billion rupee (USD1.2 billion) debt. Other potential investors, including Indigo Partners and the Hinduja Group, decided against getting involved in rescuing the debt-ridden carrier.
The creditors have so far tried to stave off the commencement of the bankruptcy proceedings in order to prevent further deterioration of the airline's value and asset repossessions.
Earlier in June, two small operational creditors, Shaman Wheels Pvt Ltd and Gaggar Enterprises Pvt Ltd, filed their respective bankruptcy claims against Jet Airways. The court has yet to recognise the claims and to likely join them in a single proceeding with the banks' case.
