Jet lenders asked to release interim funds

Mumbai: The dedicated bankruptcy court has directed the financial creditors of Jet Airways to provide interim finance immediately for maintenance of aircraft and to keep the company as a going concern.
On Wednesday, the Mumbai bench of the National Company Law Tribunal (NCLT) directed the financial creditors to approve and allocate funds to the resolution professional (RP) of Jet Airways.

Earlier, the counsel for the resolution professional had informed the tribunal that the share of banks in interim financing was approved in the first meeting of the Committee of Creditors (CoC) held in July, where the lenders had decided to release collectively Rs 63 crore.



“However, so far, only the State Bank of India (SBI) and the Syndicate Bank had released their part of the fund,” said the counsel for RP to the NCLT. “…other lenders including Yes Bank, Indian Overseas Bank, Punjab National Bank, IDBI Bank, Axis Bank and Bank of India have either not released or some have not even sanctioned funds.”

The RP had informed the tribunal that the lead consortium bank SBI has given Rs 10 crore while other lenders have sanctioned about Rs 26 crore, but not released yet while a few banks have not even sanctioned the funds despite agreeing to disburse in the CoC meeting.

After hearing the arguments, the tribunal presided over by VP Singh and Rajesh Sharma asked lenders to release the funds within two weeks.

Ashish Chhawchharia, partner and head of Grant Thornton India's restructuring practice and RP of the company, was not available for comments on the development.

According to Aisish Pyasi, Associate Partner at law firm Dhir & Dhir Associates, the principal bench has already taken a view in earlier matters that financial creditor will have to contribute for the Corporate Insolvency Resolution Process (CIRP), else the process will come to a halt.

The RP of the Jet Airways has received claims worth close to Rs 30,000 crore and has so far accepted only about one-third that came from financial creditors. The RP has accepted close to Rs 8,500 crore from financial institutions and is in the process of verifying claims worth Rs 15,000 crore.

Naresh Goyal founded Jet Airways over 25 years ago. The airline stopped flying on April 17, having failed to raise money to keep itself afloat. The court admitted its plea on June 21 and appointed a resolution professional to implement the insolvency procedure for the airline.

The Indian government has ordered the Serious Fraud Investigation Office (SFIO) to carry out an investigation against Jet Airways and six of its affiliate companies, including subsidiary airline Jet Lite and Jet Privilege, the loyalty rewards company it owns with Etihad Airways.