LM: Jet Airways crisis worsens as govt steps in, pilots threaten strike

19 March 2019: A crisis at Jet Airways (India) Ltd deepened on Tuesday as an increasingly worried government called for an emergency meeting, angry passengers demanded refunds and pilots threatened to go on strike over unpaid salaries.

Civil aviation minister Suresh Prabhu asked his officials to call for a meeting to discuss grounding of flights, advance bookings, cancellations, refunds, and any potential safety issues, at the cash-strapped carrier.

Saddled with debt of more than $1 billion, Jet Airways is struggling to stay aloft. It has delayed payments to banks, suppliers, pilots and lessors—some of whom have started cancelling their lease deals with the airlines.

The groundings have forced Jet Airways to cancel hundreds of flights, some at the last minute, leaving passengers stranded. Many have taken to social media to voice their angst.

Jet Airways is currently operating only 41 aircraft, just a third of its original fleet, the aviation regulator, the Directorate General of Civil Aviation (DGCA), said in a statement, adding that the situation is fluid and the airline may be forced to reduce its fleet further in coming weeks.

Several angry passengers were seen demanding pending refunds for cancelled flights at Jet Airways’ offices in Mumbai earlier on Tuesday, a source told Reuters.

The airline’s pilots union has also said that pilots have decided to stop flying from 1 April if Jet Airways does not have a rescue plan in place by 31 March and does not provide a proper roadmap on paying their overdue salaries.

“It is not about the salary right now, it is about whether we are going to survive,” one pilots told television news channel ET Now.

Jet Airways did not immediately respond to a request for comment.

The 25-year-old airline is in talks with its lenders—state-run banks led by State Bank of India (SBI)—and its biggest shareholder, Abu Dhabi-based carrier Etihad Airways PJSC, to secure a rescue deal but talks have dragged on and it is struggling to finalise a plan.

While on the surface Jet Airways’ future still hangs in the balance, there has been behind-the-scenes support from the government indicating that a bailout is likely, Reuters reported earlier on Tuesday.

The government has asked state-run banks to rescue the privately held airline without pushing it into bankruptcy, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election, people familiar with the matter have said.

DGCA said that with the current fleet, Jet Airways is likely to operate only about 985 flights a week or 140 flights a day—down from an average of about 650 flights a day in March 2018.

The regulator also said that Jet Airways’ pilots, cabin crew and ground staff who have reported any kind of stress should not be put on duty, and the airline should carry out regular maintenance of its aircraft even if they are currently grounded.

Prabhu, in a separate statement on Tuesday, asked officials to continuously monitor the situation at Jet Airways and ensure that public interest and safety are given top priority.

The Live Mint reported

BS: IL&FS case: Reserve Bank moves NCLAT seeking modification in order related to NPAs

19 March 2019: The Reserve Bank on Tuesday moved the NCLAT seeking modification of its order that restrained banks from declaring accounts of IL&FS and its group companies as NPAs even as the tribunal asked the banking regulator not to make it a “prestige issue”.

Admitting the apex bank’s plea, which contends that there is an overlap of power, the tribunal also wanted it to clarify whether its NPA (Non-Performing Assets) norms and powers come in the way of successful resolution of IL&FS.

The NCLAT said the RBI can not restrict it from prohibiting banks from ‘asset classfication’ and observed that any change in this order would upset the entire resolution process of the IL&FS and 300 group companies, which are sitting on the huge debt amounting to over Rs 90,000 crore.

The Reserve Bank of India has moved the tribunal requesting it to modify its order restraining banks from classifying IL&FS and its group companies as NPAs, contending that there was an overlap of power.

The central bank contended before National Company Law Appellate Tribunal (NCLAT) that it is regulator of banks and it should also be heard in the matter, which the bench agreed and directed the matter to be listed on March 29.

The NCLAT said that it would hear the RBI on the issue and asked the banking sector regulator to clarify if its NPA norms and powers come in the way of successful resolution of IL&FS companies.

A two-member bench headed by Justice S J Mukhopadhaya wondered that the effected banks have still not come before it and instead of that the RBI has come forward.

“We have not prohibited you (from declaring NPA), we have just said that you need our permission before doing so. Please do not make it as a prestige issue. If the effected lenders have not moved to NCLAT, why is RBI before us,” the bench said.

The NCLAT also told the RBI that the apex bank could not prohibit the appellate tribunal from restraining the banks.

“We can not regulate bank but can prohibit bank. You can regulate bank but can not prohibit a tribunal,” said Justice Mukhopadhaya.

Over the RBI’s argument of overlap of power conferred to it, NCLAT told banking regulator “overlap would be only, where you have powers”.

The RBI, through his counsel said that its norms governing classification of assets as NPAs are constitutionally sound under the RBI Act, Banking Regulation Act.

Senior advocate Gopal Jain appearing for the RBI said: “We are not here on recovery of loans, we are on the issue of classification”.

On this appellate tribunal also said that “your circular must have an object” and NPA is only for recovering the amount.

Passing an order on February 25, NCLAT had said : “We make it clear that due to non-payment of dues by the Infrastructure Leasing & Financial Services Limited’ or its entities including the Amber Companies’, no financial institution will declare the accounts of Infrastructure Leasing & Financial Services Limited’ or its entities as NPA’ without prior permission of this Appellate Tribunal.

During the proceedings, senior advocate Ramji Srinivasan appearing for IL&FS informed the NCLAT that the number of green companies has increased to 50 from the previous number of 21.

“29 more IL&FS companies have been added in Green list. Total would be now 50 and NCLAT can consider releasing the additional 29 green cos from the moratorium to begin releasing payments to lenders,” he submitted.

He also informed that the number of amber companies has also been increased to 13 from the previous 10.

“We are not against classification of Green or Red cos if they default. However, we can not allow classification of amber firms as NPAs. It must ensure that amber companies remain going concerns for successful resolution,” said the NCLAT.

It also directed the Ministry of Corporate Affairs and IL&FS to submit roadmap and asked to clarify whether amber companies can discharge their debt liability by paying debts of their senior secured financial creditors.

Srinivasan also informed NCLAT that they are in process to appointing resolution consultants.

“These resolution consultant would work alongside Justice DK Jain Committee for resolution of group cos,” he said, adding that it would work on a Committee of Creditors – like mechanism where lenders will be invited to join and invite resolution applicants for individual group companies.

Earlier, the corporate affairs ministry submitted the debt resolution plan for IL&FS.

The entire resolution process is based on the principles enunciated in the Insolvency and Bankruptcy Code, as per the ministry.

Under the plan, the government has categorised IL&FS group companies into green, amber and red based on their respective financial positions.

Companies under the green category would be those that continue to meet their payment obligations.

Amber category would be for those companies that will not be able to meet their obligations but can meet only operational payment obligations to senior secured financial creditors.

Amber category entities “are permitted to make only payments necessary to maintain and preserve the going concern”.

“Companies falling in the red category are the entities which can not meet their payment obligations towards even senior secured financial creditors,” as per the plan. Such companies would be permitted to make payment necessary to maintain and preserve.

The Business Standard reported

BQ: Bank of America Dives Deep Into India’s Bad Debt

19 March 2019: Bank of America Corp. has bought its biggest distressed asset in India, adding to a growing trend of foreign investors diving deeper into the country’s massive pile of bad debt.

A group of investors led by the U.S. bank have paid 33 billion rupees ($479 million) for soured loans of a beleaguered Indian maker of cast iron pipes, according to people familiar with the matter.

The group, which includes local bad debt buyer Assets Care & Reconstruction Enterprise, bought distressed loans of Jayaswal Neco Industries Ltd., with a face value of 47 billion rupees, said the people, asking not to be identified as they aren’t authorized to speak publicly. Lenders led by State Bank of India sold the debt, taking a haircut of 30 percent on the all-cash deal, the people said.

As India battles with the worst non-performing loan ratio among the world’s major economies, foreign investors are vying for a piece of the $190 billion pile of soured and stressed debt. Steelmakers have struggled to repay debt in recent years, with Essar Steel India Ltd. among one of the most high-profile cases. Jayaswal Neco became stressed as a slump in demand for its products eroded its debt repayment capability.

Bank of America has been upping the ante on its investments in India. Its purchases of distressed loans in India include those of telecom tower firm GTL Infrastructure Ltd. and SevenHills Hospital. It was also the sole bidder for State Bank of India’s $2.2 billion Essar Steel loan, which was scrapped.

Representatives for BofA, Assets Care & Reconstruction and SBI couldn’t immediately respond to an email seeking comment on the loan purchases.

  • Foreign investors that have been active in India include Deutsche Bank AG, which is setting up a unit in India to buy and reorganize soured debt.
  • Other overseas investors including Blackstone Group LP and SSG Capital Management Ltd. have bought into existing asset reconstruction companies.
  • More than 29 asset reconstruction companies have been set up in India under a 2002 law, passed to help lenders reorganize non-performing assets, RBI data show.

The Bloomberg Quint reported

FE: Amid JetAirways flight cancellations, govt to meet airlines tomorrow on rising airfares

19 March 2019: Aviation watchdog DGCA has called a meeting on Tuesday noon to discuss with airlines the upward spiral in airfares as Jet Airways continue to ground its aircraft and cancel a significant number of flights, a government official said. According to the official, after the Directorate General of Civil Aviation (DGCA) grounded all 12 of SpiceJet’s 737 Max aircraft on March 13 following the Ethiopian Airlines crash, that killed 157 people, the problem of rising airfares in Indian market has “aggravated”.

“DGCA has called a meeting at Tuesday noon to discuss the airfare rise because of significant number of cancellations done by Jet Airways in the last few weeks,” the government official told PTI. Cash-strapped Jet Airways Monday said it has grounded four more planes, taking the number of aircraft that are non-operational due to non-payment of lease rentals to 41. Etihad Airport services, in a notification to its passengers on Sunday, said, “Jet Airways has cancelled all their flights from Abu Dhabi with immediate effect from March 18 due to operational reasons”.

According to its website, the airline has a fleet of 119 planes. For last few weeks, passengers have been venting their ire on social media as Jet Airways’ flight cancellations have increased gradually due to rising number of grounded aircraft. Grappling with financial woes, the carrier has been looking at ways to raise fresh funds.

In a filing to the stock exchanges on Monday, the airline said, “An additional four aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements.” The company had earlier said that it is actively engaged with all its aircraft lessors and are regularly providing them with updates on the efforts taken to improve the liquidity.

On March 8, Jet Airways Chairman Naresh Goyal wrote to Etihad Airways Group CEO Tony Douglas seeking an urgent funding of Rs 750 crore and also warned that any delay in fund infusion might result in its grounding of the carrier, He had said that more than 50 of the aircraft are grounded amid increasing arrears of vendors and salaries to a section of employees.

Jet Airways has a debt of over Rs 8,200 crore and needs to make repayments of up to Rs 1,700 crore by the end of March. On March 10, a 737 MAX aircraft operated by Ethiopian Airlines crashed near Addis Ababa killing 157 people, including four Indians. This was second such crash involving the 737 MAX aircraft in less than five months. In October last year, an aircraft operated by Lion Air crashed killing over 180 people in Indonesia. Therefore, the DGCA on March 13 grounded all 12 of SpiceJet’s 737 Max aircraft.

The Financial Express reported

BTVI: Govt Asks Banks To Save Jet Airways, Avoid Bankruptcy: Sources

19 March 2019:  India’s government has asked state-run banks to rescue privately held Jet Airways without pushing it into bankruptcy, as Prime Minister Narendra Modi seeks to avert thousands of job losses weeks before a general election, two people within the administration told Reuters.

The finance ministry has in the past year sought regular updates from the banks, led by State Bank of India, on Jet’s financial health, the people said. In recent months, the banks have provided weekly updates about a revival plan and also sought government advice, the people added.

“Top officials at the finance ministry seek regular updates on the issue,” said an official at one of Jet’s lenders, who did not want to be identified as discussions are private.

Details of the discussion between the finance ministry and bankers on bailing out Jet have not been previously reported.

New Delhi has urged state-run banks to convert debt into equity and take a stake in Jet in a rare move in India to use taxpayer money to save a struggling private-sector company from bankruptcy. The two people plus one more source, however, said this would be “transitory” and lenders could sell the stakes once Jet revives.

The government has also nudged its 49 percent-owned National Investment and Infrastructure Fund (NIIF) – created to invest in stalled and new infrastructure projects – to buy a stake in Jet, a separate government source said.

Saddled with more than 1 billion dollars of debt, Jet is struggling to stay aloft. It has delayed payments to banks, suppliers, employees and aircraft lessors – some of which have begun terminating lease deals.

The world’s biggest democracy is gearing up for an election next month and its booming aviation sector, which employs close to a million people, has been one of the job-creation success stories that Modi can point to as he seeks a second term.

It is crucial for India that Jet revives as the fall of its second-largest airline could have “disastrous consequences for the investment climate” in the sector, a top government official told Reuters.

The official is concerned that if Jet collapses it could drive up airfare in a fast-growing market, wiping out efforts to bring low-cost air travel to India’s hinterland.

A chaotic end could also make it more difficult for the government to sell a stake in Air India, at least in the short run. Last year, it failed to sell part of its stake in the indebted carrier which currently relies on taxpayer money.

If the government’s plan for Jet succeeds, then state-run banks including SBI and Punjab National Bank (PNB) PNBK.NS as well as NIIF would together own at least a third of the airline until they find a new buyer.

Currently, Abu Dhabi’s Etihad Airways is Jet’s largest shareholder with a 24 percent stake.

India’s finance ministry, SBI, PNB and Jet Airways did not respond to requests for comment.


Most companies in Jet’s financial condition would be placed by creditors into India’s new bankruptcy process, two bankers said. However, memories of the chaos sparked by Kingfisher Airlines’ demise in 2012 have prompted the government to seek a more sober road to rescue, they said.

Kingfisher’s bankruptcy caused job losses, lessors lost millions of dollars and banks took massive writedowns.

Putting what is essentially a services provider like Jet through the bankruptcy process would diminish its value because it owns no major assets, unlike a manufacturing company, as most of its planes are leased, said another government official.

If it is pushed into bankruptcy and lessors start pulling even more planes out of service, there would be nothing left for any potential investors, the official said. Already 41 planes have been grounded by lessors in the past three months, leading to flight cancellations. (Full Story)

While on the surface Jet’s future still hangs in the balance with its main shareholder Etihad at loggerheads over the final terms of any deal, behind-the-scenes support from the government means there is likely to be a bailout.

But there are no easy options, one of the sources said, adding that the lenders do not have the expertise to run an airline so they have to decide what to do once they convert their debt into equity.

New Delhi is also backing a proposal for Jet’s founder and Chairman Naresh Goyal to step down if it means saving the airline, another official said.

“Saving Jet is not equivalent to saving Goyal,” the official said.


Jet, with its fleet of 119 planes, once controlled a sixth of India’s domestic aviation market. The 25-year-old airline is also one of only two full-service carriers that flies to international destinations. The other is Air India.

The government ideally wants four to six major airlines to ensure fares are competitive and passengers have greater choice, according to the top government source.

India plans to build 100 new airports costing about $60 billion which would need a steady stream of flights to sustain them, and that is possible only if there are enough airlines, a separate official said.

“The investment in these airports will solely depend on operators willing to have regular flights at affordable prices and one operator going bankrupt does not help,” he said.

BTVI reported

ET: Etihad asks SBI to buy its 24 per cent stake in Jet Airways

19 March 2019: In a setback to Jet Airways revival plans, Gulf airline Etihad Airways has proposed the top lender of Jet Airways, State Bank of India (SBI), to buy its 24 per cent stake in the airline. This has come when there were reports that Etihad has conveyed to SBI that it won’t make any further investment in the troubled airline. 

According to a ET Now news break, Etihad has offered its stake in Jet to SBI at Rs 150 per share or approx Rs 400 crore. This offer to SBI values Jet Airways at approx Rs 1,800 crore. 

The development comes days after Jet’s lenders told Etihad it could exit if didn’t agree to conditions in the resolution plan. Key among the conditions was an immediate infusion of Rs 750 crore in Jet by Etihad, which the Gulf carrier didn’t agree to. Etihad’s owners, the royal family of Abu Dhabi, have been jittery for a while about the uncertainty in talks. 

The development may mean the beginning of an endgame for Jet, which is facing its worst financial crisis in its 25-year-old existence. The airline has defaulted on loan repayments, grounded a majority of its planes, delayed payments to most vendors including aircraft leasing companies and delayed salaries. In a filing to the BSE, the airline said it is late in a bond interest payment because of liquidity constraints. 

Losing Etihad would mean Jet would have to look for a new partner which may mean another round of talks. Meanwhile, Jet which defaulted on loans in December has 15 days before it is liable to be referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. To be sure, it has repaid some lenders and made its account current with them. But the airline, which has been constantly cancelling flights, will be weighed down by customer refunds. 

Jet is said to have sent feelers to other potential investors including Etihad’s Doha-based rival Qatar Airways. 

Etihad had in 2013 bought 24% stake in Jet for $379 million, giving the cashstrapped airline a fresh lease of life. This was part of Etihad’s strategy to invest in airlines and make them part of its global plan of aggressive growth in the global skies. The strategy proved to be costly and loss-inducing in several cases. Etihad has incurred a combined loss of close to $3 billion in 2017 and 2018.

The Economic Times reported

ET: NCLT allows fresh bids for Castex as Liberty fails to pay

19 March 2019: After Amtek Auto, the Chandigarh bench of the bankruptcy court has allowed fresh bids for its distressed unit Castex Technologies, with the winning bidder Liberty House failing to pay Rs 100 crore as performance bank guarantee for its resolution plan. 

However, the National Company Law Tribunal (NCLT) bench has said that while seeking fresh bids, the resolution professional must also “consider” the second highest bidder, Deccan Value Investors (DVI). 

“…there is a clear default in not complying with the essential terms and conditions of the… process memorandum,” the court said in its written order published on Friday. Liberty House had offered to pay Rs 2,505 crore for Castex, which owes Rs 7,313 crore to lenders. Liberty House declined to comment. 

For effective conclusion of the resolution process, a period of 118 days has been deducted from the total period of 270 days to account for the time spent on litigation after Liberty House was adjudged the preferred bidder. The 270-day period had expired in September last year. 

According to the process memorandum, Liberty House was required to pay Rs 100 crore as performance bank guarantee within 10 days of receiving the letter of intent (LoI), something it failed to do. Later, it came up with an offer to convert the bid bond guarantee of Rs 40 crore into performance bank guarantee and to create an escrow account for the remaining Rs 60 crore. 

However, the tribunal refused to accept the payment in the offered form. 

For Amtek Auto, the parent company of Castex, Liberty House had emerged the highest bidder but failed to pay the required Rs 4,400 crore. For both bids, the UK-based steel company claimed there were differences between sales and profit projections shared with it and what existed in reality. 

The court has imposed a fine of Rs 10 lakh on Liberty House as “exemplary costs” for making a “mockery of the system of the CIRP process for which strict timelines are provided”.

The Economic Times reported

ET: Etihad flexes muscle, says it will exit Jet if resolution plan not reworked

19 March 2019: Etihad has flexed its muscle and told lenders of bankrupt Jet Airways to rework the resolution plan for the bankrupt airline, failing which it will press to exit the joint venture.

Sources tell ET Now that Etihad has communicated this to lenders, and added that it will not infuse emergency funds of Rs 750 crore till the resolution plan is acceptable to it. Etihad currently has a 24% stake in the airline. 

This may leave the lenders with no choice but to invoke insolvency and take Jet to the NCLT. 

Etihad did not respond to all the queries sent by ET Now but did send this statement as a response: “As a minority shareholder, Etihad is working closely with Indian lenders, the company and key stakeholders to facilitate a solution for Jet Airways.” 

Jet still has not reverted, or answered any of the queries sent by ET Now. 

The breakdown in talks is also demonstrated by Jet cancelling all flights to and from Abu Dhabi, which is the headquarters of Etihad. 

Experts say the Narendra Modi government can do little till the two equity partners take a decision. It’s election year and the the incumbent government cannot afford the closure of an airline. It has already got India‘s sovereign fund NIIF to work with Jet’s lenders to take a majority stake in the beleaguered airline. 

The two equity partners of Jet–Etihad and founder Naresh Goyal and family have failed to arrive at a middle ground. Sticky points range from the future role of Naresh Goyal at the airline he founded nearly 25 years ago to his equity post resolution and also the number of nominees the Goyal family can nominate to the Board. 

The Etihad board has met at least twice recently but failed on both occasions to approve the MoU terms for a resolution. As per the terms Etihad is supposed to infuse nearly Rs 1,600 crore, but its stake will be capped below 25% to prevent the trigger of an open offer. This as per the MoU would be the shareholding post the expansion of the capital base. Lenders were pitching in with Rs 1000 cr as infusion for a 29.5% stake, while the NIIF was entering the cockpit with a 20% stake. Goyal’s stake was to range between 17-22%, with 22% being the upper cap. ET Now learns this has been one of the biggest bone of contentions, as Goyal is not happy with this quantum. 

Etihad’s own losses are at a cumulative $3bn in 2017 and 2018 on account of investments in Europe going bad. This could very well be another reason fro Etihad seeking an exit. 

Jet had been on the brink of collapse in 2013 too, and then Naresh Goyal had brought Etihad on board with a 24% stake, and ensured cash infusion of nearly Rs 3600 crore.

The Economic Times reported

BS: Jet Airways crisis deepens as Etihad refuses to agree on contours of deal

18 March 2019: Tony Douglas, the chief executive officer of Abu Dhabi-based Etihad Airways, flew down to Mumbai on Monday morning for an unusual meeting with State Bank of India (SBI) Chairman Rajnish Kumar and a few other top bankers to discuss the sticky issues in the rescue plan for Jet Airways. 

At the end of the meeting, the crisis seemed to have deepened as Etihad, which holds 24 per cent in Jet, refused to agree on the contours of the deal. According to sources aware of the development, Douglas has informed a consortium of lenders, led by SBI, that Etihad would not participate in the rights issue or infuse fresh funds under the current terms and conditions of the resolution plan.

It is learnt that the lenders made it clear to Etihad that it must either endorse the bank-led resolution plan or convey to them that it’s not willing to put in more money.
The bankers also told the airline that they are willing to take “hard decisions’’, hinting that they could think of taking Jet to the National Company Law Tribunal (NCLT) if a resolution fails. Although Jet has run out of cash completely and has grounded half its fleet, the lenders have so far resisted any move to take the airline to the NCLT. Dragging Jet Airways to the NCLT could mean a haircut of 55-60 per cent for the lenders. (The difference between the banks’ outstanding loan and what they realise from the sale or liquidation under bankruptcy proceedings is referred to as a haircut.)

Another reason why lenders are trying hard to save Jet from bankruptcy is that the government wouldn’t like an airline going down so close to the Lok Sabha elections. 

While the official statements issued by Jet and Etihad conveyed a sense of continuity, executives tracking the events closely indicated a deadlock over the current deal. Even as Jet employees including pilots fear a shutdown of the operation, founder chairman Naresh Goyal wrote a letter to the airline staff saying it was a ‘’complex process’’ and would therefore require more time. 
“The complexity of the process has led to some delays and will require a further short time to conclude. I am personally committed to have the process completed as soon as possible and restore much needed stability to our operations at the earliest… Meanwhile, talks with our strategic partner Etihad Airways and lenders led by State Bank of India are ongoing. We are in constant dialogue with them,” Goyal wrote while assuring the staff that their pending salaries would be cleared once all parties sign on the resolution plan.

The Business Standard reported

ET: IDBI Bank moves NCLT against Osian’s Connoisseurs

18 March 2019: Private lender IDBI Bank has approached the National Company Law Tribunal (NCLT) against Neville Tuli-promoted arthouse Osian’s Connoisseurs of Art Pvt Ltd for the default of about Rs 125 crore. The Reserve Bank of India has classified the previously state-owned bank as a private lender from January 21, 2019. 

Mumbai-based Osian’s Connoisseurs is considered to be the country’s pioneering arts institution and auction house, which houses an archive, library and a collection of antiquities, miniatures, sculptures and other cultural artefacts. 

Two persons familiar with the development said the lender has approached the Mumbai bench of the National Company Law Tribunal (NCLT). The company was declared a Non-Performing Asset (NPA) on March 2010, however, later, certain loans were restructured. 

“The bank has decided to propose Girish Sriram Juneja as interim resolution professional (IRP) at the National Company Law Tribunal,” said one of the people quoted above. “The properties of the company also include ‘Minerva Theatre,’ an iconic single screen theatre of yesteryears situated in tony South Mumbai locality and its office located in Nariman Point area as securities.” As per the audited accounts of Osian’s Connoisseurs, as on March 2018 the current assets of the Neville Tuli-owned company stood at Rs 106 crore including artworks. 

The company had tried for One Time Settlement (OTS) with the lender from 2014 to 2016 but that did not materialise. 

Nishith Dhruva, a managing partner of law firm MDP & Partners, who is representing IDBI Bank in the dispute, confirmed the filing of insolvency petition but refused to divulge any details citing the matter was sub judice.

“Recently, the bank also appointed valuers to help the resolution and we readily agreed to the process. Now this NCLT decision has been taken by the bank, which is their privilege,” said the company in its response. 

“They will need to consult with other parties and all related legal counsel as they only have a pari-passu charge on the assets. Whatever process is taken forward, we will support a just resolution,” it added.

The Economic Times reported