
The revival of Jet Airways will perhaps take more time than what was expected. Jalan-Kalrock consortium (JKC), which had taken over the resolution process of the fallen carrier, has informed the National Company Law Tribunal (NCLT) that it needs more time to repay creditors and implement the plan.
After more than 25 years of operations, full-service airline Jet Airways was grounded on April 17, 2019, amid a severe cash crunch. The insolvency process began in June 2019 and the NCLT approved a resolution plan submitted by the Jalan-Kalrock Consortium on June 22, 2021.
As per the January 13 verdict of the NCLT, the Jalan-Kalrock Consortium is supposed to make the first tranche of the payment to lenders before May 15, which is next week.
The consortium, however, has now filed an application before the tribunal, seeking exclusion of the period between November 16 and April 13 from the 180-day period to pay the first tranche, according to a report in CNBC TV18.
After the tribunal ruled the case in favour of JKC, it was given 180 days to make payments of Rs 180 crore to the erstwhile creditors of the airline and Rs 250 crore to former employees. While May 15 is the last date to make the payments, the consortium has made no payments so far.
The NCLT has also fixed November 16 as the effective date for implementing the consortium's resolution plan.
The extension
The consortium, in its application before the NCLT, has said that the lenders are to be blamed for the delay in the implementation of the resolution plan.
JKC has claimed that the lenders shared the bank account details of the airline, which is the first of many moves to implement the resolution plan, on April 13. April 13 was the 148th day after November 16. It said without the bank account details, the consortium would not be able to infuse the funds.
Since banks took 148 days out of the specified 180 to begin the resolution process, JKC said it only had a month to implement the plan, which was neither feasible nor viable. Therefore, it is now seeking an exclusion of that period.
This isn't the first time that the consortium has blamed lenders for the delay. Earlier, the court had excluded the period between May 20 and November 16, 2022, giving the consortium an additional 180 days to make the payments.
As per news reports, the Jet Airways lenders are expecting Rs 270 crore from JKC in the first tranche, which includes the payment to lenders, workmen, operational creditors, and the CIRP cost.
As per the Supreme Court directions, JKC has an added responsibility of paying over Rs 200 crore towards Provident Fund and gratuity to Jet employees.
According to the resolution plan, the Jalan-Kalrock consortium had proposed a cash infusion of Rs 1,375 crore, including Rs 475 crore for payment to stakeholders.
The remaining Rs 900 crore was to be infused for capital expenditure and working capital requirements. At Rs 380 crore, the lenders took a steep haircut on their admitted claims of over Rs 7,807.7 crore under the approved resolution plan.
Sanjiv Kapoor’s departure
In April, Sanjiv Kapoor, the CEO-designate of grounded airline Jet Airways, resigned from the company on May 1, making it the third senior executive exit in the same week. Kapoor had joined Jet Airways in April 2022 and was expected to revive the airline back to its glory.
JKC on April 28 announced that Kapoor will be leaving the company effective Monday, May 1, at the conclusion of his notice period.
"JKC remains fully committed to the revival of Jet Airways, and the Executive Committee of JKC will oversee CEO-designate responsibilities until a suitable replacement is in place," said the consortium in a press release.
Ankit Jalan, Board Member - JKC, said: “Sanjiv joined us in April 2022 to spearhead the revival of Jet Airways, and drove the business and launch plan as we prepared to re-start the commercial operations of Jet Airways. JKC is grateful to Sanjiv for his contribution to the launch plans of Jet Airways during his time with us and we wish him the very best for his future endeavors. JKC will be announcing the new CEO for Jet Airways shortly.
"The revival of Jet Airways is through a Court Approved Process, which has taken more time than originally estimated by us, but needless to say JKC is committed to the revival of Jet Airways. We are in the last leg of closing the transfer of ownership of Jet Airways to JKC, subsequent to which we will settle outstanding amounts payable to previous creditors as per our approved Resolution Plan and shall, soon thereafter, recommence the commercial operations of Jet Airways as per our re-launch plans.”
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