The liquidation order from the apex court meant that the shareholders of Jet Airways, including about 1.43 lakh retail investors, are staring at a bleak future.
When a company is liquidated, it essentially means shutting down of operations, selling off the assets, and distributing the proceeds to pay off debts and obligations.
In this case, retail investors, who bet on the revival of the airline, will likely face losses, as equity shareholders are usually the last in line to receive any funds. In most liquidation cases, there’s often nothing left for equity shareholders, leading to a total loss of their investment.
The bench, chaired by Chief Justice D Y Chandrachud and Justices J B Pardiwala and Manoj Misra, ordered that requisite steps be taken for starting the liquidation process of the grounded airline.
The lender creditors are further permitted to encash the performance bank guarantee of Rs 150 crores furnished by the SRA.The NCLAT on March 12 upheld the resolution plan of the grounded air carrier and approved the transfer of its ownership to JKC. The SBI, Punjab National Bank and JC Flowers Asset Reconstruction Private Limited challenged the NCLAT verdict.The appellate tribunal had further directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days. Besides, the NCLAT had also directed the lenders of Jet Airways to adjust Rs 150 crore paid by the consortium as performance bank guarantee.
The banks had said the JKC failed to meet its financial obligations, including the infusion of Rs 350 crore within the stipulated 180-day period from the effective date under the resolution plan.
Jet Airways, which has remained grounded since April 2019, had in September, 2023 said the new proposed promoters — the Jalan-Kalrock consortium — had completed an additional infusion of Rs 100 crore into the carrier.
