The National Company Law Tribunal (NCLT) on Thursday admitted an insolvency plea filed by State Bank of India (SBI) against grounded airline Jet Airways.
The insolvency process will allow lenders led by SBI to sell the debt-ridden company as a whole or sell its assets in a piecemeal fashion.
The tribunal asked the resolution professional to immediately take over the airline’s assets and handle the case with ‘utmost care’ given its national implications.
The court has also sought a progress report within three months and directed the resolution professional to submit updates every 15 days starting July 5.
Operational creditors have been asked to file their claims with the appointed resolution professional.
Ahead of the NCLT hearing, Jet Airways shares recorded huge gains towards the end of the trading session, closing a whopping 89.9% firmer. It had risen as much as 150% in intraday trade.
Earlier this week, a consortium of 26 bankers led by SBI had taken the airline to the bankruptcy court in a bid to recover their dues of over Rs 8,500 crore.
Jet Airways also has other liabilities over Rs 15,000 crore owed to the aircraft vendors/lessors and other suppliers.
Speaking to shareholders at the bank's 64th annual general meeting on Thursday, SBI chairman Rajnish Kumar said lenders had dragged Jet Airways to the insolvency court only after exhausting all other options to revive the airline.
After first hearing the case on June 13, the bankruptcy court had adjourned the insolvency plea against the beleaguered airline to June 20 as the airline needed more time to respond to notices for recovery of dues.
Once India's biggest private carrier, Jet Airways was forced to stop flying in mid-April after running out of cash. Its collapse has left thousands without jobs and pushed up air fares across the country.
A number of bidders including the Hinduja Group had expressed interest in Jet Airways in recent weeks, but nothing materialised.
Two operational creditors, Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt. Ltd, had on June 10 filed separate insolvency pleas against the Naresh Goyal-founded Jet Airways with the Mumbai bench of the NCLT for recovery of dues.