The corporate insolvency resolution process has begun at Jet Airways as the interim resolution professional (IRP) met the management of the airline on Saturday and apprised them of the way ahead with respect to pending payments and revival possibilities, sources close to the development said.
Grant Thornton India's Ashish Chhawchharia, who has been named the resolution professional for Jet Airways' bankruptcy proceedings, took charge on Saturday. He and his team met over a dozen senior executives of the airline including Captain Nikhil Ved, Rajesh Prasad, Gautam Acharya, Prasenjit Ganguly among others.
Chhawchharia communicated to the airline's officials that the management of the affairs of the company and power of the board of directors shall now rest with him and the officers, and managers of the company shall report to him and provide access to such documents and records of the company as may be required, sources said.
"All signing powers of all authorized signatories of Jet Airways are suspended as of now" sources said, adding that there is a complete moratorium of all claims, proceedings, cases and notices to Jet Airways. No properties or assets of Jet Airways or in custody or used by Jet can be attached by anyone. The eviction notice of Siroya and other places have also been stopped.
"The financial institutions maintaining accounts of the company shall act on the instructions of the undersigned in relation to such accounts and furnish all information available with them with respect of the company to the undersigned," a communication from Chhawchharia to all employees and workmen of Jet Airways read.
Under the process, the resolution professional will also invite bids from potential investors for the airline. However, if no buyers are found within 90 days, then the airline will go into liquidation.
A committee of creditors, represented by lenders, will also be formed in a period of three weeks, sources said. This committee will be chaired by Chhawchharia and will function like a board of directors and will vote on various proposals.
The resolution professional also apprised the officials of two scenarios with respect to the employees.
"In case of liquidation, employees dues will be as per waterfall mechanism. first priority will be NCLT expenses, next will be workmen’s compensation pending till 24 months and secured lenders and third will be staff dues pending till 12 months and Unsecured creditors. In case an investor is found, the past dues will depend on the amount or percentage of dues that the successful bidder is willing to pay for past dues. It may or may not be fully 100 percent," sources added."CIRP (Corporate Insolvency Resolution Process) is a process for resolution of financial stress and it shall be our endeavour to ensure that the company operates in the best interest of all stakeholders including its employees workers and contractual staff. We look forward to your cooperation and support during the period," Chhawchharia's communication to Jet Airways employees read.