Following the National Company Law Appellate Tribunal (NCLAT) August 28 extension granting Jalan-Kalrock Consortium (JKC) – the winning consortium for the revival of Jet Airways – time till September 30 to pay Rs 350 crore to lenders, it has deposited Rs 100 crore as payment to lenders.
“JKC confirms to have deposited Rs 100 Crores in Jet Airways in less than 48 hours of the NCLAT allowing implementation of revival plans,” the consortium said in a statement released late Thursday evening.
“With this infusion, JKC has now invested Rs 250 crores in Jet Airways and now is only required to fund the remaining Rs 100 crores in Jet Airways by September 30, 2023, to take control of the iconic airline, Jet Airways,” the statement added.
The consortium had earlier deposited a performance bank guarantee of Rs 150 crore towards Jet Airways’ revival. In its order, the apex appellate tribunal has permitted adjusting the bank guarantee against the total payment.
The airline’s lenders called the Committee of Creditors (CoC) had approved the resolution plan jointly submitted by Dubai-based businessmen Murari Lal Jalan and German serial entrepreneur Florian Fritsch in October 2020. But what was supposed to be a major test of the country’s Insolvency and Bankruptcy Code (IBC), 2016, instead turned into an acrimonious legal battle between the consortium and the CoC over the infusion of funds.
Having deposited the performance bank guarantee with the lenders, JKC had maintained that any further infusion would be possible only after the transfer of ownership of the airline.
However, the Supreme Court’s July order to implement a resolution plan excluding liquidation has brought new hope for the beleaguered project.
Scope for another carrier
Although comebacks in the aviation sector are rare, experts said there was a scope for another carrier in the world’s fastest-growing airline market.
“After Go First filed for voluntary bankruptcy, airfares saw a steep rise. India has the appetite to absorb another good airline, and Jet [Airway] just fits the bill,” opined Ajay Kumar, Managing Partner at the Gurugram-based law firm KLA Legal.
However, a lot has changed in the market ever since the airline ceased operations in April 2019.
“Now, the market has the well-established low-cost carrier IndiGo, full-service carriers Air India and Vistara backed by the Tata group, and Akasa Air as its competitors. Popular routes such as Delhi-Mumbai will be hard to grab,” cautioned Reeva Chugh Arora, Founding Partner at New Delhi law firm AviLeague Partners.
The next hearing in NCLAT on the matter is due on October 4.
Also read: Jet Airways: Is the revival of the airline possible at all now?