The promoters or Jet Airways failed to pay their share of Rs 750 crore for interim funding required by the airline to sustain operations, leading to non-infusion of funds by its lenders, the government on Thursday said.

"To mitigate immediate operation crisis faced by the company interim funding of Rs 1,500 crore was proposed. Out of Rs 1,500 crore required for interim funding, promoters were expected to bring in Rs 750 crore and the lenders would provide the remaining amount. However, the promoters did not bring in the full amount of their share. Therefore, the lender's consortium led by State Bank of India could not infuse the committed interim fund," minister of state (independent charge) for civil aviation Hardeep Singh Puri informed Lok Sabha in a written reply to a question.

The government said Jet Airways jeopardised its ability to sustain operations by aggregating losses during the last few quarters and as a result, there were significant overdue towards all creditors including the lessors of the aircraft, pilots, suppliers, oil companies, employees etc.

"Lenders explored various options for the revival of company through Resolution Plan. Meanwhile, bids were called by the lenders for change in ownership/management of the company. However, no unconditional and proper bids were received," the government said.

As some of the relaxation or waiver sought by potential bidders were only available under a Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, 2016 (IBC), the State Bank of India filed an application in National Company Law Tribunal (NCLT), Mumbai on June 17 to work out a resolution plan, the government informed the Lower House. The application was admitted by NCLT, Mumbai on June 20.

Admitting that a large number of employees of different category working with the airline have been adversely affected, the government said the revival of the airline is now possible only under IBC.

The government clarified that it has no role in raising funds for Jet Airways as it is an internal matter of the airline.

"Further, each airline prepares its business plan on the basis of its own market assessment and liabilities. Mobilising financial resources and ensuring efficient operations as per business plan are the responsibility of the airline. Government of India has no role in raising funds for Jet Airways, as it is an internal matter of the airline, the government said.

First Published:Jun 27, 2019 8:14 PM IST