Jet shares slip as lenders move bankruptcy court

 

Jet shares slip as lenders move bankruptcy court
The grounding of Jet Airways has sent airfares on Gulf-India routes surging by over 40 per cent on average over the past two months.

Dubai - Stocks hit an intra-day low of 32.25 rupees per share, falling by a massive 52%

by

Issac John

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Tue 18 Jun 2019, 9:00 PM

Last updated: Tue 18 Jun 2019, 11:35 PM

Shares of Jet Airways plummeted more than 50 per cent at one point on Tuesday as investors abandoned the grounded airline following a crucial decision by its lenders to initiate bankruptcy proceedings against embattled carrier.
Stocks of 25-year old Jet Airways, once the largest private sector airline in India, hit an intra-day low of 32.25 rupees per share, falling by a massive 52 per cent. At 1.41pm Jet's stocks were trading at 38.05 rupees per share, down 30.25 rupees or 44.29 per cent.
On the National Stock Exchange, shares plunged 40.78 per cent to close at 40.50 rupees apiece. During the day, it dropped 53.72 per cent to a record low of 31.65 rupees.
On the traded volume front, six million shares of the company were traded on the BSE and over 40 million shares on the NSE during the day.
The nosedive in share value came close on the heels of a move by State Bank of India-led consortium of lenders to send the debt-ridden and cash-strapped airline - which has suspended its entire operations on April 17 - to the National Company Law Tribunal. The grounding of the airline has sent airfares on Gulf-India routes surging by over 40 per cent on average over the past two months.
SBI in a statement after a meeting of the 26 lenders on Monday said that after due deliberations, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received.
Shares have also been on a in a defensive posture following announcement that stock exchanges will impose restrictions on trading in Jet Airways' shares from June 28 as part of preventive surveillance measures to curb excessive volatility.
Lenders in their meeting on Monday decided against an outright sale of Jet Airways to the lone bidder, instead voted to send it for bankruptcy to recover their 85 billion rupees dues. Besides the huge debt to public sector banks, the airline has a total liability of about 250 billion rupees, which includes dues of operational creditors.
Saj Ahmad, an analyst at London's StrategicAero Research, said Jet Airways' grounding in April should have set alarm bells ringing.
"Lenders' move to start bankruptcy proceedings comes as no surprise, especially when you consider that a bulk of Jet's fleet has been returned to lessors, leaving the carrier with almost nothing to work with even if it could arise from its present position," Ahmad told Khaleej Times on Tuesday.
"It's also not surprising that no white knight has come to rescue Jet either. It's arguably fair to say that even trying to revive the airline is as much a waste of time as it is a waste of money," he added.
The airline, started over 25 years ago by entrepreneur Naresh Goyal, stopped flying on April 17 after it ran out of cash and the unpaid lessors took away most of its 100-odd operational airplanes. Etihad Airways, which owns 24 per cent stakes in the airline since November 2013 after investing 20. 62 billion rupees did not try to boost its stake as part of a rescue package.  
The decision to go to the bankruptcy court comes amid reports of Goyal being put on a lookout notice by federal law enforcement agencies and also launching a money laundering probe against him. - issacjohn@khaleejtimes.com
 
 
 


More news from