Two employee associations of Jet Airways will approach the National Company Law Tribunal (NCLT) next week and become parties in the insolvency proceedings against the carrier.
The Mumbai bench of the tribunal had on June 20 admitted the insolvency petition of State Bank of India (SBI) to sell Jet Airways. This followed a meeting of all lenders, 27 of them, on June 17, and it was decided to pursue insolvency proceedings under the Insolvency & Bankruptcy Code (IBC).
The two associations are: The Society for Welfare of Indian Pilots (SWIP) and Jet Airways Aircraft Maintenance Engineers’ Association (JAMEWA).
The National Aviators Guild, the union of Jet Airways’ pilots, is also expected to take a similar step.
“Claims will be filed as per procedure. It will take at least a week to collect the data, thereafter we will proceed,” a senior official told Moneycontrol.
The associations had earlier written and met banks, offering to take control of the airline, which had suspended operations on April 17. They promised an investment of Rs 7,000 crore, which includes Rs 3,000 crore from investors and Rs 4,000 crore from employees through hypothetical five-year employee stock option programme.
The airline owes around Rs 3,000 crore to its employees. The carrier had stopped salary payments from March.
On June 18, SBI had filed an insolvency petition under Section 7 of IBC in the Mumbai bench of NCLT and also proposed Ashish Chhawchharia of Grant Thornton as the Insolvency Resolution Professional (IRP).
NCLT directed the IRP to submit fortnightly progress reports on the case, with the first such report to be submitted before July 5.
The banks decided to approach NCLT after the bidding process initiated by them broke down. Sources had earlier said the main suitors, Etihad Airways and the Hinduja Group, had sought assurances against the open offer, and had asked banks to take a deep haircut on Jet Airways’ debt of over Rs 8,000 crore. This was not agreeable to the banks.
With the scene now shifting to the insolvency courts, the focus will now be on the bidders.
While Eithad Airways has said it is studying the possibility of participating in the insolvency process, the Hinduja Group is yet to comment.