Jet Airways: NCLT Approves Kalrock-Jalan Consortium’s Revival Plan
The consortium had proposed to repay banks, financial institutions, and employees Rs 1,200 crore over next 5 years.
The resolution plan for bankruptcy-hit Jet Airways, submitted by a consortium of London-based Kalrock Capital and UAE-based businessmen Murari Lal Jalan, was approved by the National Companies Law Tribunal (NCLT) on Tuesday, 22 June.
However, the approval comes with the caveat that historic rights over landing slots will not be available to the airline and determination of the same will be done by the Directorate General of Civil Aviation (DGCA), reported BloombergQuint.
Nineties days have been given to the DGCA and Aviation Ministry by NCLT, to allocate slots to Jet Airways, as part of the revival plan.
Jalan-Kalrock Capital have been given this time to approach the DGCA on the issue, after which they will need to approach the NCLT for further directions.
Though sources said that the matter about Jet being given its historic routes remains unresolved and more talks are needed to determine its domestic and international routes, a top consultant told NDTV that the new routes will be decided within the next 90 days.
Jet Airways, which operated more than 120 planes had suspended its operations in April 2019 and has been undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC) for two years, news agency PTI reported.
The Jalan-Kalrock consortium said in a press statement, “The Consortium maintains its stand that it wants to work alongside the Ministry of Civil Aviation, the Directorate General of Civil Aviation (DGCA) and all its competitors to put Jet Airways back in the skies.”
In October 2020, the Committee of Creditors (CoC) of the grounded airline had approved the resolution plan submitted by the consortium.
The Kalrock-Jalan consortium had proposed to repay banks, financial institutions and employees Rs 1,200 crore over next five years. The consortium also plans to establish Jet Airways as a full service airline with 30 aircrafts within the next six months.
However, this contrasts with claims totalling Rs 15,432 crore from financial and operational creditors, which were admitted by the Jet Airways’ Resolution Professional (RP) and partner, Grant Thornton.
“Surprisingly, the NCLT order is a massive clean-up,” said Kapil Kaul, CEO and director, CAPA Advisory.
He added, “It will allow the new promoters to develop a viable business case subject to significant capitalisation,” The Hindu reported.
Meanwhile, Ashish Chhawchharia, Head of Restructuring Services at Grant Thornton Advisory, told NDTV, “Based on discussions I have been having, given the order has been received today (Wednesday), I think it would be a fair estimate to say that by the end of this calendar year we can hope to get Jet in the skies again."
He explained, “They want to start with 20 narrow-bodied and five wide-bodied aircraft. It may not all happen at a snap on day one. But they may be able to bring in these aircraft in a short span. I think there is certainly hope for people who have stuck on and had faith in Jet Airways.”
Doesn't Have to Be the Exact Same Slots
Chhawchharia added, “While we are a bit disappointed for not geting the historic slots, it doesn't have to be the exact same slots Jet was using earlier. Even if it is something near about, we can work with that.”
Chhawchharia was quoted as saying, “I am confident that the DGCA and Ministry of Civil Aviation will give fair consideration to the business proposal for Jet’s revival. Apart from airports such as Delhi and Mumbai, on preliminary analysis, it appears that other airports have sufficient slots, whereas some are likely to expand their capacity,” The Hindu reported.
The airline's financial and operational creditors were owed nearly Rs 30,000 crore after the operations were halted, NDTV reported.
Chhawchharia was quoted as saying, “When they see Jet flying again, I am sure filling up the planes is not going to be a problem. I think it is an upward graph from here."
(With inputs from NDTV, The Hindu and PTI)
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