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Bank moves to place Jet Airways in insolvency resolution

Jet Airways major lender State Bank of India has filed court action to have Jet Airways placed into insolvency resolution.

A listing document for the Mumbai bench of the National Company Law Tribunal shows that the matter has been listed for a "mentioning" hearing on 19 June, which is expected to start off the formal resolution process.

Sources tell FlightGlobal that an insolvency professional from Grant Thornton has been lined up to guide the airline through the process, however the accounting firm would not confirm that it has been appointed.

FlightGlobal understands that once the process commences, the professional will have 180 days to come up with a resolution plan for the company to satisfy its creditors.

Separately, the airline's two independent directors, Ashok Chawla and Sharad Sharma, tendered their resignations on 17 June. That leaves it effectively with no board nor a senior executive team.

On 17 June the airline's lenders agreed to seek resolution under India's Insolvency and Bankruptcy Code after only receiving one conditional bid for the carrier, which has been grounded since 17 April due to a lack of funds.

Given the failure of the previous sale process, however, it appears most likely that the airline's few remaining assets will be liquidated and the company wound up.

Media reports indicate that Jet's lenders are owed around Rs80 billion ($1.15 billion), while trade creditors are owed a further Rs25 billion. Two of those creditors launched court action last week, with the matter adjourned to 20 June. It is unclear how that action will be affected by the decision to place it into insolvency resolution.

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