A mint-fresh revival plan for financially battered Jet AirwaysNSE -3.40 % drawn by its lenders has likely come undone after India’s apex court declared rules governing the plan unconstitutional and ultra vires or done beyond one’s legal power or authority.
The first step of the plan is to give Jet’s lenders a controlling 50.1 per cent stake in the airline for a value of Rs 1. This is based on a circular by the Reserve Bank of India on February 12 that overhauled debt restructuring rules ..
According to the plan, lenders will take over Jet and look for a new investor for the beleaguered airline, eventually giving an exit to its promoter Naresh Goyal and second majority shareholder Etihad Airways. The Supreme Court order undermines the first step and may derail the plan, said experts.
(i.e. transfer of said shares) done by banks under aforesaid circular can also be challenged. Therefore, the verdict may compel banks to take corrective action to transfer valid title (shares or otherwise) to an interested buyer. This might have an impact on cases like Jet Airways,” said Makarand Joshi, partner, MMJC and Associates LLP – a corporate compliance firm.
Others said the verdict may put the ball back in Goyal’s court.
Others said the verdict may put the ball back in Goyal’s court.
“Certainly, the Supreme Court judgement gives him (Naresh Goyal) more teeth. But, if he’s sensib ..
The first step of the plan is to give Jet’s lenders a controlling 50.1 per cent stake in the airline for a value of Rs 1. This is based on a circular by the Reserve Bank of India on February 12 that overhauled debt restructuring rules ..
According to the plan, lenders will take over Jet and look for a new investor for the beleaguered airline, eventually giving an exit to its promoter Naresh Goyal and second majority shareholder Etihad Airways. The Supreme Court order undermines the first step and may derail the plan, said experts.
(i.e. transfer of said shares) done by banks under aforesaid circular can also be challenged. Therefore, the verdict may compel banks to take corrective action to transfer valid title (shares or otherwise) to an interested buyer. This might have an impact on cases like Jet Airways,” said Makarand Joshi, partner, MMJC and Associates LLP – a corporate compliance firm.
Others said the verdict may put the ball back in Goyal’s court.
Others said the verdict may put the ball back in Goyal’s court.
“Certainly, the Supreme Court judgement gives him (Naresh Goyal) more teeth. But, if he’s sensib ..
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