InvestorQ : I am holding equity shares of Jet Airways which I had bought last year. With Jet referred to bankruptcy, can I get any value or should I sell the shares?
sara Kunju made post

I am holding equity shares of Jet Airways which I had bought last year. With Jet referred to bankruptcy, can I get any value or should I sell the shares?

Answer
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2 years ago
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It is very unlikely that equity shareholders will be able to recover anything from the bankruptcy process. Normally, when a company is referred to the IBC process, the recovery rate is about 40% for creditors. But in this case of Jet Airways, the company does not have any assets in its books. Its aircraft were leased and most of them have been repossessed by the lessors. Also, the airline has lost most of its employees and hence to recommence its operations is going to be a very long haul. Lastly, the routes of Jet Airways and its parking bays and landing rights are already being auctioned to other airline companies. In this context, it is very unlikely that equity shareholders will get any value from the bankruptcy. Since the stock has bounced in the last 2 days, you must use this bounce to exit the stock at a loss and reallocate the money elsewhere.

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