Business Standard

Bankers, you can have your Jet and eat it too

Using interim financing under IBC is likely to resolve Jet's woes faster and better

Jet airways

Settle Down: By not dragging Jet to the NCLT process, bankers are robbing the company of an opportunity to overhaul its operations drastically and in a time-bound fashion to enhance value

Diva Jain New Delhi
The decline of Jet Airways’ business and the resulting distress to its creditors have elicited a sharply polarised response from observers. Some have supported the lead banker’s (in this case the State Bank of India) assertion that providing Jet with interim support increases the probability of a recovery while others have enthusiastically invoked Schumpeter’s creative destruction to espouse a dissolution of the troubled airline. Both the views are partially correct and are unable to completely grasp the economics of creative destruction and the strategic purpose of bankruptcy. 

Creative destruction does not mean the destruction of businesses with the attendant mass layoffs
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Mar 28 2019 | 9:19 PM IST

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