Jet Airways hits 10% lower circuit as NCLT accepts insolvency plea

The stock is due to be excluded from the F&O segment with effect from June 28.

Reuters
India’s bankruptcy court on Thursday admitted an insolvency petition by Jet Airways’ top lender State Bank of India, paving the way for a formal resolution process for the distressed airline.
The stock opened at Rs 56.60 against its previous closed at Rs 62.85. The stock had unexpectedly soared as much as 150 per cent on Thursday — one of the highest gains by a stock during a trading session, catching traders by surprise.

"There is a lot of debt on the company and the list is too long. The creditors, lenders, Leasors, employees, the fleet also comprise of planes that are on rent. So we don't think there can be some big turnaround. We have seen this kind of volume before and the jump. That turned out to be a trap. It is about time that this one would also prove to be the same," said Mustafa Nadeem, CEO, Epic Research.

India’s bankruptcy court on Thursday admitted an insolvency petition by Jet Airways’ top lender State Bank of India, paving the way for a formal resolution process for the distressed airline.


The National Company Law Tribunal presided over by judges VP Singh and Ravikumar Duraisamy also approved an insolvency resolution professional (IRP) to oversee the insolvency proceedings.

Judge Singh said that while an RP usually has 180 days to complete the process, it would have to be completed in three months in Jet’s case, as it is a matter “of national importance”.

The insolvency resolution professional would immediately take control of all the assets of Jet and would have to submit a progress report every 15 days. The first of the reports will be presented to the court on July 5, he said.
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The NCLT also rejected the intervention application filed by a trustee appointed by a court at the Netherlands, decreeing it had no jurisdiction on a company registered in India, as there were no cross-border insolvency laws prevalent.

The stock is due to be excluded from the F&O segment with effect from June 28 and will also be transferred to the trade-for-trade segment from that day-which would mean compulsory delivery of shares.
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