The National Stock Exchange of India (NSE) said on Wednesday that shares of Jet Airways (India) Ltd will be removed from daily trading of futures and options effective 28 June, citing the embattled carrier’s failure to respond to queries about persisting rumours in the market.
Shares of the Mumbai-based carrier fell 1.38% on Wednesday to₹106.3 on the BSE, compared with a 0.48% decline in the benchmark Sensex.
The company’s shares have shed nearly 71% in a year, underperforming the Sensex’s 11.39% gain.
Jet Airways has deferred interest payments to banks and dues to fuel suppliers, oil marketing companies, and aircraft lessors.
As a result, lessors of the airline had grounded most of its 119 planes.
The debt-ridden carrier has also not paid some employees since March. Jet Airways spent ₹781.19 crore as remuneration for its employees during the October-December 2018 quarter.
NSE also cited the company’s failure to submit financial results for the year ended 31 March, as well as observations made by its auditor, as reasons for its decision.
Several people from the top management and board of directors of the carrier, which has not operated a flight since 17 April, have left the company in the past few months, following the departure of founder and chairman Naresh Goyal in March.
Lenders to Jet Airways, led by the State Bank of India (SBI), are seeking investors to recover their dues.
The airline’s total liability, including unpaid salaries and vendor dues, is nearly ₹15,000 crore. If all else fails, Jet Airways may be referred to the National Company Law Tribunal (NCLT).
However, under bankruptcy resolution, lenders may recover only a fraction of the ₹8,400 crore the airline owes them.
Sources reported on Tuesday that the Hinduja Group and Etihad Airways PJSC may not proceed with plans to resurrect the airline, dealing a severe blow to rescue efforts.
The pilots union of Jet Airways will file a plea against the grounded airline at the NCLT for non-payment of salaries and not providing a provision for gratuity payment to its staff, two senior members of the union said on Tuesday .
The union, the National Aviators Guild (NAG), counted about 1,100 of the airline’s 1,600 pilots as its members before the grounding of the carrier.
Two operational creditors of Jet Airways, Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt. Ltd, had on 10 June filed separate insolvency pleas against Jet Airways at NCLT, Mumbai, for recovery of their dues.
Shaman Wheels is motor dealership in Mumbai and Gaggar Enterprises is a mineral producer in Ahmedabad, according to the ministry of corporate affairs website.
Shaman Wheels, a vendor for trucks and trailers for the airline, has dues of ₹6.28 crore pending from Jet Airways. Gaggar Enterprises sold packaged drinking water to the carrier and the money owed to it could not be ascertained immediately.
The plans of the National Aviators Guild to approach the NCLT could further impact lenders’ recoveries from Jet Airways. In case Jet Airways is not liquidated and insolvency is resolved, the new investor who bails out the carrier would need to take on the liability, including salaries.
Source: Financial Express, June 12, 2019