Insolvency proceedings have been initiated against debt-ridden Jet Airways, which formally stopped flying on 17 April and saw lenders voting for bankruptcy earlier this month.
The cash-strapped company became the first domestic airlinerto go into bankruptcy after the Mumbai bench of the National Company LawTribunal (NCLT) admitted an insolvency petition filed by SBI on behalf of 26lenders on June 20. “Pursuant to an order dated June 20, 2019 of NCLTMumbai Bench, Corporate Insolvency Resolution Process (CIRP) has been initiatedfor Jet Airways (India) as per the provisions of Insolvency and BankruptcyCode, 2016,” Jet Airways said in a regulatory filing Sunday.
It further said that upon initiation of CIRP, the powers ofthe Board of Directors of the company have been suspended and shall beexercised by the Interim Resolution Professional.
Jet Airways owes more than Rs 8,000 crore to banks, andthousands of crores more in arrears to vendors, lessors and employees.
The airline formally stopped flying on April 17 and banksvoted for bankruptcy on June 17.
The NCLT bench comprising VP Singh and Ravikumar Duraisamyset a 90-day deadline to resolution professional Ashish Chhauchharia of GrantThornton to conclude the resolution process, even though the bankruptcy lawallows 180 days for the same, saying “the matter is of nationalimportance.”The bench also instructed the resolutionprofessional to file fortnightly progress report and submit the first suchreport on July 5 when it will begin to hear the matter again.