Lenders of bankrupt airline Jet Airways, led by the State Bank of India (SBI), on Thursday told the Supreme Court that successful bidder Jalan Kalrock Consortium (JKC) was "unwilling" to pay the dues and that the "liquidation" was the only option left. The bench led by Chief Justice of India (CJI) DY Chandrachud was hearing the SBI-led consortium plea against the NCLAT's March order upholding ownership transfer of the bankrupt airline to JKC.
More than five years ago on an April evening, cash-starved Jet Airways announced temporary grounding of operations after flying as a full service airline for 25 years. Since then, more than 20,000 jobs and money worth thousands of crores owed to lenders, vendors and passengers evaporated while awaiting an insolvency resolution. And today, the Supreme Court ordered the airline's liquidation, marking the formal completion of a turbulent journey into the sunset and shattering lean revival hopes.
Lenders of debt-ridden Jet Airways on Tuesday filed an appeal in the National Company Law Appellate Tribunal (NCLAT) against implementation of the resolution plan by the Jalan-Kalrock consortium, according to sources. The sources said the lenders have maintained that the condition precedent mentioned in the resolution plan of the consortium has not been met. And therefore, the plan is not valid. "The lenders want the plan to be circled back to the committee of creditors (CoC) for fresh consideration," the sources said.
Jet's air operator certificate will lapse on May 19.
A consortium of 26 lenders led by the SBI, with 51 per cent stake in the debt-trapped airline, has invited bids from potential suitors.
Jalan-Kalrock Consortium, the winning bidder for bankrupt Jet Airways, on Monday said aviation regulator DGCA has renewed the airline's air operator certificate. Cash-strapped Jet Airways stopped flying from April 17, 2019. The Air Operator Certificate (AOC) was re-issued on May 20, 2022. However, since the airline did not start operations, AOC expired on May 19, 2023.
The resolution plan has to be put to work this month itself. Jet has a debt of over Rs 8,000 crore and needs to make repayments of up to Rs 1,700 crore by the end of March.
It couldn't be immediately ascertained whether he has partnered with any entity or airline for the bid.
These are the four primary issues that have soured the relationship between SBI-led lenders and JKC and delayed the resumption of commercial flights by Jet Airways, once India's largest private airline, which went bankrupt in 2019. Over the past three years, the airline went through an insolvency process under which JKC's resolution plan was approved by a committee of creditors (lenders) and the National Company Law Tribunal (NCLT) in October 2020 and June 2021, respectively. But this didn't mean an end to the problems.
After a meeting of banks on Friday on ways to make funds available immediately, a source in the know said lenders other than SBI and Punjab National Bank had not come on board so far to chip in with their funds.
"The central government had rescued other businesses by re-structuring debts to the tune of Rs 30,000-40,000 crore. Compared to this, the amount (debt) of Jet Airways was much smaller. Moreover there was a resolution (accepted) by the lenders to save jobs and to save the airline," Sharma said.
The office, spread over 52,775 square feet carpet area, in Mumbai's suburban financial centre Bandra Kurla Complex, is on the fourth floor of the building 'Jet Airways Godrej BKC'.
There are only three entities left in the fray now - Russian Fund Treasury RA Partners, Panama-based investment firm Avantulo Group and South American conglomerate Synergy Group Corp.
Jet said a resolution plan that contemplates various options, including proportion of equity infusion by various stakeholders and the consequent change in the company's board, is being worked out.
Both Jet Airways and Go First have met with a similar fate of landing up in insolvency, albeit for different reasons. Whether Go First will be able to avoid the sharp erosion in value like in the case of Jet, experts say, will depend on how quickly it is able to restart operations and retain its slots at airports. Go First, owned by the Wadia group, filed for voluntary corporate insolvency resolution on May 2 due to inadequate capacity utilisation that led to a cash crunch.
The National Company Law Tribunal on Tuesday approved the Jalan-Kalrock Consortium's resolution plan for the bankrupt Jet Airways.
The move comes a day after an urgent meeting of lenders with Goyal and Etihad Airways chief executive officer Tony Douglas to resolve various issues between the two promoters as well as lenders and Etihad.
Two associations representing pilots and engineers have written to SBI chairman Rajnish Kumar proposing that they would take over the airline and can bring in up to Rs 7,000 crore.
When Jet Airways shut operations, the slots which were allocated to it were temporarily distributed among various airlines. And, the airlines that were called upon to immediately create infrastructure so that the public at large does not face any hardship have invested huge amounts of money to created infrastructure to utilise such slots. "In view of this, though the allocation of slots to such airlines is temporary the same can't be withdrawn from them without any legitimate basis.", the affidavit said.
The company has finalised a three year business plan to increase revenue and control costs.
'Boeing has returned some cash to the airline which will help it improve the current liquidity crisis.'
Switching to a damage-control mode, bankers and government officials claimed that Jet Airways wouldn't fall even if Etihad refuses to back the resolution plan and exits.
A Jet Airways employees' union has moved court for liquidation amid continued differences between lenders and the Kalrock-Jalan consortium over the revival of the grounded airline. Last month, the consortium had made an application to the National Company Law Tribunal (NCLT) seeking control of the airline. The consortium said it has fulfilled all the conditions according to the plan and said banks should initiate steps to hand the company over to them.
All India Jet Airways' Officers and Staff Association on Thursday said it has filed an appeal before the NCLAT against Jalan-Kalrock consortium's resolution plan for the airline. In October 2020, the airline's Committee of Creditors (CoC) approved the resolution plan submitted by the consortium of the UK's Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan. The plan was later cleared by the Mumbai bench of the National Company Law Tribunal (NCLT).
Airline sources said Goyal, who had stepped down as chairman of the carrier last month, has withdrawn his bid for the airline.
Brookfield Asset Management will pay around Rs 29,000 per square foot for the 170,000 square feet of space in Jet Airways' two-floor office in Bandra Kurla Complex.
In another development, SBI Capital Markets, which had issued the expressions of interest on April 8, extended the deadline for submission of initial bids to April 12.
Jet Airways will be able to take to the skies once again, after aviation regulator DGCA on Friday granted it a revalidated air operator certificate, allowing the airline to resume commercial flight operations.
'Shouldn't the DGCA ensure both safety and convenience of passengers?' 'And convenience has been a casualty as nobody knows which Jet flight would be grounded next, throwing passengers' plans in disarray,' says Nivedita Mookerji.
'Shouldn't the DGCA ensure both safety and convenience of passengers?' 'And convenience has been a casualty as nobody knows which Jet flight would be grounded next, throwing passengers' plans in disarray,' says Nivedita Mookerji.
Jet Airways has been hit by three top-level resignations ahead of its relaunch. The three senior executives who have resigned include Captains Niraj Chandan (head of flight safety), Vishesh Oberoi (head of operations) and Sorab Variava (head of training). These posts are critical and generally senior pilots are nominated for the roles.
The lenders are offering 31.2-75 per cent stake in the company on a fully diluted basis.
Jet Airways HQ owner wants resolution professional to vacate premises. The licence for occupying the place has been terminated, on account of the airline having not paid the rent after March.
State Bank of India on Monday invited bids from strategic as well as financial bidders for stake sale in ailing Jet Airways, and the bids have to be submitted by April 10, said a public notice.
Kalrock Capital-Murari Lal Jalan combine has emerged as the frontrunner. A consortium of Imperial Capital and FSTC is the other bidder.
According to the resolution plan, the airline is planning to start with six to seven aircraft on domestic routes and looking to restart international service within six months of resuming operations.
The Kalrock-Jalan consortium - new owners of Jet Airways - has got an assurance from around 30 airports that if the airline restarts operations, 170 pairs of slots can be made available. However, whether those slots will be according to the airline's demand will depend on the order of the insolvency court, which is slated to come next week. Sources said the new management feels it is extremely important that some of those slots are restored or else its business plan of operating Jet as a premium carrier will not be viable.
Jet Airways is seeing a churn in its senior management ahead of its planned take-off this year. Sudhir Gaur, accountable manager and acting chief executive officer, is the latest to quit the company. Finance head M Shivakumar and head of management information system (MIS) Farazad Patrawalla moved out a few weeks earlier. Gaur had been part of the initial team selected by the Kalrock-Jalan consortium, which secured approval from the National Company Law Tribunal (NCLT) last June to revive the airline.
A consortium - comprising Imperial Capital, Flight Simulation Technique Centre, and Big Charter - have placed a bid for Jet, while the other consortium is led by Kalorck Capital.
Sources involved in the bidding process confirmed that the entity had submitted a bid but expressed doubt over its acceptance
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