February 25, 2019 / 8:35 AM / 3 months ago

UPDATE 2-Jet Airways' top creditor says no decision made on going to insolvency tribunal

* SBI, Jet call reports of SBI going to NCLT “speculative”

* Jet shareholders have approved rescue plan

* Jet’s pilot union warns of “non-cooperation” from March 1

* Jet says it is working to pay overdue salaries (Adds Jet, Etihad statement)

By Chris Thomas

Feb 25 (Reuters) - State Bank of India (SBI) said reports on Monday that it was considering taking heavily indebted Jet Airways Ltd to an insolvency tribunal to recover loans were “speculative”, and no such decision had been taken.

The loss-making Indian airline approved a rescue deal in mid-February after months of crisis-talks to plug a 85 billion rupee ($1.2 billion) funding hole. The plan includes selling a majority stake to a consortium led by SBI, the airline’s biggest creditor, at 1 rupee.

Indian media reports on Monday said SBI planned to go to the National Company Law Tribunal (NCLT) to recover its loans from Jet as it felt the airline was running out of funds for operations.

“Reports have been appearing in the media about (a) decision taken by SBI to refer Jet Airways to NCLT. These are totally speculative and SBI would like to state that no such decision has been taken,” a spokesperson for SBI said.

Jet also said that the media reports were “speculative”.

Saddled with a billion dollars in debt, Jet has defaulted on loans and has not paid pilots, leasing firms and suppliers for months.

In a rare joint statement, Jet’s Chairman Naresh Goyal and Tony Douglas, CEO of second-biggest shareholder Etihad Airways, said on Monday they were working together with other stakeholders to implement the bank-led provisional resolution plan.

Jet said late on Friday that its shareholders had approved the plan to convert existing debt to equity, paving the way for the airline’s lenders to inject funds and nominate directors to its board.

Lenders can initiate proceedings under the Insolvency and Bankruptcy Code (IBC) to recover dues from debt-laden entities. The process can begin only after approval from the NCLT.

Jet Airways’ pilots, who are yet to receive a part of their November wages, have warned of “non-cooperation” from March 1, should the outcome of discussions for further payouts be unsatisfactory, Jet’s pilot union, National Aviator’s Guild, said. The union has not yet clarified what action pilots might take.

Jet said it was working out a “mutually acceptable arrangement” to ensure that the company pays overdue salaries. ($1 = 71.0550 Indian rupees) (Reporting by Chris Thomas in Bengaluru; Additonal reporting by Chandini Monnappa; Editing by Muralikumar Anantharaman and Susan Fenton)

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