Shares of Jet Airways slumped to an all-time low on Tuesday, 11 June as the Hinduja Group and Ethiad Airways considered to halt their investment plans in the debt ridden airlines, The Mint reported. The airline was forced to seize all flight operations two months back.
Jet shares slumped as much as 14.8 percent to an all-time low of Rs 106.3, Reuters reported. The company had fallen nearly 69 percent in one year as of Monday’s close.
Why Is It Happening?
Last month, Middle Eastern carrier Etihad, which owns about 24 percent stake in Jet, had submitted a bid to invest in the airline, while London-based family-run group, Hinduja, was considering an offer, too. But both decided against their investment plans, The Mint reported, citing anonymous sources familiar with the matter.
"“As far as bidding for Jet Airways is concerned, the Hinduja Group has taken a back seat now. The promoters of the group feel that it’s too risky for them to get involved(with Jet Airways) at the moment, due to ongoing government investigations and the recent insolvency pleas submitted by operational creditors at the NCLT.” " - Sources to The MintBackdrop
Two operational creditors of Jet, Shaman Wheels Pvt. Ltd and Gaggar Enterprises Pvt Ltd filed separate insolvency pleas on Monday, 10 June, against Jet Airways at National Company Law Tribunal, Mumbai, for recovery of their dues.
Meanwhile, the income tax department is probing possible tax violations by Jet Airways, while the corporate affairs ministry has ordered a probe into the books of the airline after the Registrar of Companies had submitted a report to the ministry highlighting instances of violation of the Companies Act in the airline.
(With Inputs from The Mint and Reuters)
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