Jet Airways nears all-time low; stock tanks 52% in three days

Jet Airways had announced temporary suspension of flight operations as lenders turned down the airline's demand for emergency funding.

The shares of Jet Airways (India) continued to be under pressure on Monday, slipping 23 per cent to Rs 127. The stock has plunged 52 per cent over the past three trading sessions on the National Stock Exchange (NSE). The stock's free fall began after the company announced temporary suspension of flight operations as lenders turned down the airline’s request for emergency funding.

The stock was trading at its lowest level since March 12, 2009 and was quoting close to its all-time low of Rs 115, hit on March 12, 2009, on the NSE in intra-day trade.

Last week, the consortium of Indian lenders, led by the State Bank of India (SBI), informed Jet Airways that they were unable to consider its request for critical interim funding.

"Since no emergency funding from the lenders or any other source was forthcoming, the airline would not be able to pay for fuel or other critical services to keep the operations going. Consequently, with immediate effect, Jet Airways was compelled to cancel all its international and domestic flights," the company said in a statement.

In past one week, the company's Independent Director Rajshree Pathy, and Non Executive Non Independent Director Nasim Zaidi have submitted their resignations "due to personal reasons and constraints of time".

Meanwhile, the SBI, the lead lender of the seven-member consortium of domestic banks that have extended loans to the airline, has started the bidding process for stake sale in the carrier and clarity about potential bidders would emerge next month.

The lenders are in favour of a resolution outside the insolvency law framework in case the ongoing bidding process fails to take off, PTI reported.

If the bidding process fails, lenders would favour a resolution for the debt-ridden Jet Airways outside the Insolvency and Bankruptcy Code (IBC) framework, the agency said quoting sources. CLICK HERE TO READ FULL REPORT

At 10:26 am, Jet Airways' shares were trading 11 per cent lower at Rs 146 on the NSE. In comparison, the Nifty 50 index was down 0.72 per cent at 11,668 points. The trading volumes on the counter jumped 1.5 times with a combined 29.69 million shares changed hands on the NSE and BSE so far.