Jet Airways 2.0: Jalan-Kalrock resolution plan not working, creditors tell SC

Jet Airways creditors on Monday told the Supreme Court that the Jalan-Kalrock resolution plan approved by the National Company Law Tribunal (NCLT) is not workable. They called for the airline to be wound up.

The insolvency process began in June 2019 and the NCLT approved a resolution plan submitted by the Jalan-Kalrock Consortium on June 22, 2021. The plan would see the consortium of Jalan-Fritsch take over Jet Airways and inject $1.3 billion into the airline.

However, the creditors have challenged the plan in the Supreme Court. They argue that the plan is not fair to all of the creditors, and that it would not be able to revive the airline.

The Additional Solicitor General (ASG) N Venkatraman told the Supreme Court on July 10 that not even a single penny has been paid to lenders or infused in the debt-laden airline. On the contrary, the lenders have infused public money of around Rs 400 crore, including airport dues.

The ASG was arguing on behalf of the resolution professional (RP) of Jet Airways. The RP has challenged the resolution plan of the Jalan-Fritsch consortium in the Supreme Court.

The ASG said that the resolution plan is not feasible and that it would not be able to revive the airline. He said that the plan would not provide enough money to pay off all of the airline's debts, and that it would not be able to attract new investors.

ASG further added that the DGCA was not ready to renew Jet Airways' Air Operator's Certificate (AOC), which expired in May. The AOC is a license issued by the DGCA that allows an airline to operate flights.

The Jalan-Kalrock consortium had not met its funds infusion target, and it was getting repeated extensions from the tribunals. The creditors' committee (CoC) had said that the company would have to go into liquidation if it were to recover any of its dues.

The Supreme Court has listed the next hearing in two weeks. The court has asked the Jalan-Kalrock consortium to respond to the allegations made by the CoC.

Jet Airways stopped flying in April 2019 after running into financial difficulties. The airline was then put under the insolvency resolution process, and the Jalan-Kalrock consortium emerged as the winning bidder in June 2021. However, ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium.

Also Read: 'There’s no question of amicable settlement with SpiceJet,' says Sun Group