Jet Airways stock falls 5%, SBI to stay away from funding airlines
Jet Airways stock fell 5% on Friday to ₹34.04 and got locked in a 5% lower price band circuit filter a day after the Supreme Court ordered for the liquidation of the airline.
Since the proceeds of the liquidation will go to the creditors and employees, the stock value would be eroded going forward according to analysts.
Though the judgement came following an appeal by creditors led by State Bank of India, its chairman declined to offer any comment and also preferred not to quantify the recovery from the liquidation proceeding.
“On Jet Airways, I don’t think there’s any view to be given. I think the Supreme Court has been categorical in terms of this case and has given clear direction to the lenders, COC and the NC, and there’s nothing much we need to talk about. And as far as recovery is concerned, we don’t talk about the individual accounts,” Challa Sreenivasulu Setty, Chairman, SBI told The Hindu, while answering a question.
Also answering another question from the press on whether any airline [Go Air} can be revived going the Jet Airways case and whether SBI would be lending to the airline industry Mr Setty said, “Not many airlines are there to be funded though we had funded airlines before. I do not think we will be funding any airline [in the future],” he added.
As per the Supreme Court judgement the corporate debtor [Jet Airways] be taken in liquidation and the NCLT Mumbai would now take appropriate steps for appointment of liquidator. Instantly the creditors will encash Performance Bank Guarantee (PBG) of Rs 150 crore given by the Successful Resolution Applicant (SRA) that is the Jalan Kalrock Consortium.
Jet Airways’ assets include 11 grounded aircraft including 8 wide-body aircraft parked in Mumbai, Delhi and Hyderabad. The lenders are reportedly paying Rs 22 crore a month towards parking fee and other expenses.
Apart from the aircrafts, Jet Airways’ commercial space measuring 15,000 sq meters in BKC, Mumbai will also be liquidated.
Published – November 08, 2024 09:10 pm IST