SBI says reports of taking Jet Airways to NCLT ‘speculative’

Jet Airways Ltd’s largest lender, State Bank of India (SBI), said media reports that it was weighing taking the debt-laden carrier to an insolvency tribunal to recoup loans were “speculative”, and that no such decision had been taken.

The statement from SBI comes days after Jet, following months of crisis-talks to plug a 85 billion rupee (USD 1.2 billion) funding hole, agreed a draft plan to sell a majority stake to a consortium led by the SBI at 1 rupee.

Indian media reports said on Monday SBI was mulling moving the National Company Law Tribunal (NCLT) to recover its loans from Jet as it felt the airline was running out of funds for operations.

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.

Jet said late on Friday that its shareholders approved the plan to convert existing debt to equity, paving the way for the airline’s lenders to infuse funds and nominate directors to its board.

Saddled with a billion dollars in debt, Jet has defaulted on loans and has not paid pilots, leasing firms and suppliers for months.

Jet Airways’ pilots, who are yet to receive a part of their November salary, have warned of ‘non-cooperation’ from March 1, should the outcome of discussions for further payout be unsatisfactory, Jet’s pilot union, National Aviator’s Guild, said.