With the Jet Airways 2.0 revival inordinately delayed, media reports citing unnamed bankers have suggested the plan is stuck owing to the non-fulfillment of payment obligations by the Jalan-Kalrock Consortium (JKC).
However, a JKC spokesperson told Business Today that they have already fulfilled all obligations outlined in the resolution plan ratified by the National Company Law Tribunal (NCLT) on May 20 this year, with all the necessary filings being made by them a day later.
“We have been pursuing the lenders since May 21 through multiple written communication to initiate the process that enables us to fund infusion in Jet Airways and implement the plan. As the handover of the company from the lenders is still awaited, the revised payment timelines are yet to be determined,” the JKC spokesperson claimed.
The spokesperson further said the consortium had already deposited Rs 150 crore with the lenders.
“There is no delay from the consortium to implement the resolution plan, and we confirm that the JKC is in full compliance of the approved plan, and it remains deeply committed to the relaunch of Jet Airways,” the person added.
Pointing out that the Rs 150 crore deposited by JKC was in the form of bank guarantees, the lenders have sought an advance payment of Rs 185 crore before they could initiate the process of ownership transfer.
The lenders have also questioned the conditions precedent met by the consortium concerning slot allotment and international traffic rights. Citing the NCLT order, the JKC spokesperson informed the old slots granted to the airline could not be reinstated and it would have to reapply for the same, which would then be allotted based on their availability by regulators.
“As per the directions of NCLT in the order of June 2021, JKC applied for slots on which it proposes to restart its operations and the said slots have been allotted in principle, subject to clearance of airport dues, which is possible only after the resolution plan is implemented. Accordingly, JKC complies with the condition precedent on slot allotment,” the spokesperson reiterated.
Similarly, the spokesperson clarified the airline won’t be able to offer international flights till it had a minimum of 20 aircraft deployed on domestic routes.
Aircraft sale not an option for lenders
Meanwhile, lenders have indicated off-record that they may look at selling 11 aircraft in their possession. However, that may not be an option. The copy of the resolution plan reviewed by BT clearly states that any decision on the sale of assets needs to be approved by the monitoring committee comprising Resolution Applicant (Jet Airways) and Financial Creditors (lenders).
Furthermore, the proceeds from such an asset sale are to be earmarked for restarting the operations of the airline and not for repayment to lenders.
“At present, it appears the lenders and Jet Airways are speaking in two different voices. While Jet seems to be claiming that they have complied with the conditions of the resolution plan, lenders seem to be unhappy with the slow progress,” opined the managing partner at the law firm KLA Legal, Ajay Kumar.
What may have further queered the pitch for bankers is the National Company Law Appellate Tribunal (NCLAT) order of October 21 directing Jet Airways to pay former employees Rs 250 crore towards the provident fund and gratuity dues. With the lenders already paring their admitted claims of Rs 7,807.7 crore to Rs 380 crore, the order may have added to their unease.
“The NCLAT order seems to be a major bone of contention. In addition, Jet must also start operations as soon as possible,” said the managing partner at the law firm KLA Legal, Ajay Kumar.
But at this stage Jet’s takeoff depends entirely on the NCLT hearing of Tuesday that will determine if lenders can transfer the airline’s ownership basis the bank guarantees furnished by JKC.
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