Jet Airways’ resurrection plans are once again showing signs of hope following the NCLT’s recent approval of the ownership transfer to the winning bidders.
Nearly four years have passed since Jet Airways filed for bankruptcy, and its revival plans have experienced a lot of back and forth. The airline hopes to begin operations in 2023 after missing its initial target date of 2022.
The Jalan-Kalrock group, the winning bidders, were given ownership of Jet Airways last week by the NCLT. This was in response to two petitions submitted by the consortium, which were also approved: one to allow the transfer of ownership and one to prolong the deadline for paying creditors’ debts.
The disagreements between the winning bidders and the creditors and other stakeholders have recently prevented Jet’s recovery plans from progressing much.
The effective date of the resolution plan was determined to be November 16, according to a two-member NCLT Mumbai bench consisting of Pradeep Narhari Deshmukh and Shyam Babu Gautam. The consortium will have six months from the stated date to pay the creditors.
The consortium will now have until the middle of May this year to pay all creditors, including workers and employees.
“JKC is fully committed to the revival of Jet Airways and all payments will be made in full compliance with the court-approved resolution plan.”
“This is the first airline that is being revived by the Insolvency and Bankruptcy Code (IBC) court process and some delays are always expected as there is no precedent for this in India. But we also believe that all delays are in the past now and all stakeholders now need to look to the future to get the airline back into the skies, which we all are committed to doing.”–Spokesperson, Jalan Kalrock Consortium (JKC)
For a while, the consortium’s plans for a relaunch of Jet at some unspecified time in July 2022 appeared to be on track. However, early last year, disagreements arose over payment concerns between the creditors and the Jalan-Kalrock Consortium.
The unpaid gratuity and Provident Fund (PF) contributions of its former employees were one of the controversial problems.
$33.6 million is the total amount of employee claims, which total 2.7 billion. Jet does not wish to pay the creditors anything more than the Rs 4.7 billion ($58.1 million) that was already agreed upon. The remaining Rs 900 crore is to be invested in working capital and capital expenditures.
Under the endorsed resolution plan, Jet Airways’ lenders have taken a significant haircut on their admitted claims totalling more than Rs 7,807.7 crore.
Additionally, Jet has been unable to sell certain of its assets, including its Boeing 777 aircraft, since an airline union is attempting to prevent the sale of these aircraft unless Jet pays the provident fund and gratuity obligations of its former employees.
Jet Airways’ revival has been an ongoing process for some time. In a somewhat dramatic manner, the airline filed for bankruptcy in April 2019. The State Bank of India-led Jet Airways Committee of Creditors designated the Jalan-Kalrock group as the airline’s new owners in October 2020 as efforts to revive the crashed company gained momentum.
Promoters of Jet have been striving to put the parts of the airline back together since the NCLT approved the airline’s revival plan in June 2021.
In the upcoming months, hopefully, the most recent development will advance the situation.
Source: Forbes India