Lenders to take Jet Airways to NCLT, revival hope gets bleaker An SBI-led consortium of banks is set to take Jet Airways to NCLT under the Insolvency and Bankruptcy Code as efforts to seek resolution outside of IBC didn't materialise. The statement from the lenders said: “A meeting of lenders was held today to consider the way forward in respect of Jet Airways. After due deliberations, Lenders have decided to seek resolution under IBC since only a conditional bid was received and requirement of the Investor for SEBI exemptions

Lenders led by State Bank of India have decided to take the grounded Jet Airways to bankruptcy courts after failing to stitch together a revival plan despite working on it for over five months.The petition by the lenders could be filed in the Mumbai NCLT as early as Tuesday.“Lenders have decided to seek resolution under IBC 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 development marks an end of an era in Indian aviation and caps an unhappy and debilitating period for Jet Airways, its management and stakeholders who have had to endure the total grounding of the airline and the departure of its several top-performing staff to other airlines or industries.ET reported on June 17 that lenders will seal the fate of the airline in a crucial meeting to be held on Monday. Etihad and the Hinduja group, the two interested bidders, were demanding over 85% haircut on Jet Airways’ debt which was unacceptable to lenders, people in the know said.IThere was also a proposal to pay only $400 million to lessors which was rejected as well. Etihad was seeking an open offer exemption and pricing concessions which didn’t go down well with the lenders as they couldn’t give these relaxations, people in the know said. Lenders are also hoping that the bankruptcy courts can decide on pricing and open offer exemptions sought by Etihad, sources said.“We gave enough time to interested parties but there was nothing concrete in the table for us to consider, so we were forced to take the company to bankruptcy,” one of the bankers involved in the discussion said.Grounded since April 17, lenders were increasingly finding it difficult to find a white knight for Jet Air with its accumulated debt of Rs 8,500 crore and total liabilities of over Rs 25,000 crore. The banks involved in the turnaround of what was once India’s second-largest airline have in the past stated that reversing the grounded carrier’s negative net worth and getting it back into the skies will be a big challenge for prospective investors.“It’s all over for Jet Airways now! Why did it take so long for banks to take the company to NCLT? Banks have been totally bureaucratic in their approach, there was no firm process to revive the airline,” said Jitendra Bhargava, aviation expert. “This effort was only to create documentation that they made sincere efforts, but their efforts was anything but sincere.”Bankers are hoping that new bidders could be attracted under the bankruptcy process to join Hinduja’s and Etihad as bidders can avoid open offers for cases under this process.“We have tried many options. The Hindujas were the last option we tried. We also tried to get Etihad to invest more and also tried to get pay off loans to the US Exim Bank and get back the planes. All these options have not worked so we have decided that IBC is the only way to go. This route also gives bidders some leeway and is a court administered process. We hope all these factors makes the process easier for bidders,” said another banker involved in the discussions.Two operational creditors, Shaman Wheels Pvt Ltd and Gaggar Enterprises Pvt Ltd, have already filed two separate insolvency pleas against the airline in the Mumbai NCLT. The hearing on these petitions is likely on June 20. Lenders petition is most likely to be clubbed with these petitions.The airline suspended all flights on April 17 after it ran out of cash to run operations and failed to raise interim loans from banks. ET had earlier reported that the Hinduja Group and Etihad are looking to stitch a deal together to save the grounded airline but no formal proposal has been received by the banks so far. A consortium of domestic lenders led by SBI had engaged SBI Caps for sale of the carrier.