Thursday, January 09, 2020

Release funds for interim finance, NCLT tells Jet Airways’ lenders

Mumbai: The bankruptcy court has directed Jet Airways’ lenders to release funds as per an earlier direction to meet the grounded airline’s interim financial requirements, warning that they could otherwise be held for contempt of court.
 The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday instructed banks to release the funds to complete the corporate insolvency resolution process, saying that lapse by the committee of creditors (CoC) on this could deplete the value of the airline.
 “The CoC needs to release the funds by January 20, failing which the bench will be constrained to take action for contempt of court,” the bench led by Bhaskara Pantula Mohan said. The share of banks in interim financing was approved in the first meeting of the CoC held in July, where the lenders had decided to release collectively Rs. 63 crore. However, so far, only State Bank of India has released its share of Rs. 10 crore.
Other lenders include Yes Bank, Indian Overseas Bank, Punjab National Bank, IDBI Bank and Axis Bank. IDBI Bank and Indian Overseas Bank have shown an inability to release the funds citing the Reserve Bank of India’s prompt corrective action (PCA) that they are currently undergoing.
 09/01/20 Maulik Vyas/Economic Times

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