Shares of Jet Airways (India) continued to reel under pressure for the eleventh straight session to hit fresh lows during the intra-day trade on Monday. The stock was down 16 per cent to Rs 68.65 apiece on the BSE ahead of the lenders’ meeting later in the day to decide rescue plan for the cash-strapped airline.
The stock has tanked 53 per cent thus far in June, as compared to 1 per cent decline in the S&P BSE Sensex.
“The fate of Jet Airways, grounded since April 17, may be decided on Monday with lenders meeting to finalise how a resolution will be possible under the June 7 Reserve Bank of India (RBI) mandate on stressed assets,” an Economic Times report quoted three bankers familiar with the matter.
Lenders will need to take a call on whether a rescue of the carrier is still possible or will it have to be taken to bankruptcy court, the report said.
“The move to work on a fresh resolution plan comes even as chances of getting a new owner to take over the airlines receded after the Hindujas, who had shown interest, said they wanted legal immunity from the various cases being filed against the company. Most experts, however, say the only alternative for the banks is to refer the airline to the National Company Law Tribunal or NCLT,” Business Standard reported on Friday, June 14, 2019.
Meanwhile, in the past three trading days, the stock has plunged 38 per cent after the BSE and NSE ordered to pull the scrip out from Futures and Options (F&O) trading from June 28.
The exchanges have also decided to switch deals on the stock to ‘trade-to-trade’ segment, effective same day till further notice. Under this category, delivery of shares is compulsory.
The exchanges said the company’s failure to provide any prompt or satisfactory response to the clarifications sought from them with respect to various rumours floating in the market and no declaration of the audited financial result for the year ended 31 March 2019 prompted them to take the decision.
“Considering the aforementioned reasons and the observations made by auditor of the company, there are concerns with regard to continuity of flow of information about the company which is very vital for the appropriate price discovery in the scrip. Hence trading in the scrip may not reflect the actual status of the company,” the statement said.
Source: Business Standards, June 17, 2019