NEW DELHI: Shares of Jet Airways fell 3 per cent in afternoon trade Monday on reports that State Bank of India (SBI) is mulling moving the National Company Law Tribunal (NCLT) against the debt-laden airline, even as the lender said no such decision had been taken.
The cash-strapped full service carrier is looking to rejig debt and raise funds, even as it has been forced to ground two more aircraft due to non-payment of dues to lessors.
Jet Airways shares declined 3 per cent to Rs 229.60 apiece on BSE in afternoon trading and had touched an intra-day low of Rs 225.
On Sunday, officials said SBI was mulling moving the tribunal to recover its loans.
A consortium of banks, led by the SBI, has extended loans to Jet Airways, which is looking to rejig debt and raise funds.
Regarding reports about SBI mulling moving NCLT against the airline, a bank spokesperson on Monday said “no such decision has been taken”.
Lenders can initiate proceedings under the Insolvency and Bankruptcy Code (IBC) to recover dues from debt-laden entities. The process can commence only after approval from the NCLT.
Shareholders of Jet Airways had approved conversion of loan into shares and other proposals during the extraordinary general meeting (EGM) on Thursday.
Officials associated with the lenders and key shareholders had said SBI was considering moving the tribunal seeking insolvency proceedings against Jet Airways since it is running out of money for operations.
Financial woes have forced Jet Airways to ground some planes; and salaries for many employees, including pilots, have been delayed.
“An additional two aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements,” the airline said in a filing to the stock exchanges on February 23.
Jet Airways, on February 7, said it had grounded four of its aircraft on account of non-payment of lease rentals.
The airline is actively engaged with all its aircraft lessors and regularly provides them with updates on the efforts undertaken by it to improve liquidity. Aircraft lessors have been supportive of the company’s efforts in this regard, as per the filing made on February 23.