The consortium of UAE-based businessman Murari Lal Jalan and UK-based private equity fund Kalrock Capital is rushing to restart Jet Airways' operations, even though differences have emerged over who will fund expenses before operations commence, sources said. The airline applied to the Directorate General of Civil Aviation (DGCA) for recertification of its air operator certificate in the last week of January. The regulator is likely to inspect the airline's preparedness to operate a flight in the middle of this month, after which it will be asked to operate a proving flight to demonstrate its ability to conduct flights safely and in accordance with rules.
Financial creditors shall submit their claims with proof by electronic means only, resolution professional Ashish Chhawchharia of Grant Thornton said in a public notice.
South America-based Synergy Group, one of the suitors, has said slots at London's Heathrow airport are critical to the airline's operations and will decide on participating in the resolution only if it gets clarity. It also wants to form a new company with its assets, employees, and operating permit but minus all liabilities.
Insolvency appellate tribunal NCLAT on Tuesday upheld the resolution plan of grounded carrier Jet Airways and approved the transfer of its ownership to Jalan Kalrock Consortium. The NCLAT bench has directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days. Besides, it has also directed the lenders of Jet Airways to adjust the Rs 150 crore paid by the consortium as performance bank guarantee.
A source said that the lenders have proposed to change the management of the beleaguered air carrier as they feel it is not possible to run the company with present management.
The process of getting a new promoter on board is likely to take another two to three months and once that happens, the banks would offload their stakes.
Of 1,400 pilots the airline has, 200 have quit in the past few months because of salary delays.
SBI is the lead lender to Jet Airways, which has a debt burden of more than Rs 8,000 crore.
The sudden massive cancellations of Jet have put travel agents and customers in jeopardy
According to the revised plan, promoter Naresh Goyal, his wife Anita Goyal and the directors nominated by the promoter would be asked to step down from the board, and the lenders, as part of the resolution process, will infuse around Rs 1,200 crore into the airline as emergency funding.
Jalan Kalrock Consortium, the winning bidder for the grounded Jet Airways, will make a total cash infusion of Rs 1,375 crore in the airline and lenders will take a steep haircut on their admitted claims of over Rs 7,800 crore under the approved resolution plan. The National Company Law Tribunal (NCLT) on June 22, approved the consortium's resolution plan for Jet Airways, which has been undergoing insolvency resolution process since June 2019. The carrier shuttered operations in April 2019.
The provisional restructuring plan has been carried out by lenders, led by State Bank of India, under the Reserve Bank of India's February 12, 2018 circular.
Etihad said it would not participate in the rights issue or infuse fresh funds under the current terms and conditions of the resolution plan
Bids to be evaluated according to guidelines by the civil aviation ministry, following which a buyer will be selected. Transfer of control to the buyer to be effected by June-end.
Ace Aviation, which has been fighting Jet Airways for the acquisition of three Boeing B777 aircraft, said that it has acquired another aircraft for the conversion slot in early February 2025.
Jet and Etihad have already agreed upon a Rs 4,000-crore interim financing plan according to which Etihad will put in Rs 750 crore either on its own or from an offshore or onshore lender, and a matching amount will be provided by the Jet lenders.
The interim funding has not been forthcoming thus far, and as a result Jet has extended cancellation of international operations until April 18.
Though NCLT has extended window to find a buyer, bankers don't see much hope of a deal.
Public sector lender Punjab National Bank (PNB) has moved the Insolvency appellate tribunal NCLAT against the approval of bids for defunct airline Jet Airways. The National Company Law Appellate Tribunal (NCLAT) bench has issued a notice over the PNB's petition along with its interim plea seeking a stay over the execution of the resolution plan. A three-member bench has directed the Resolution Professional of Jet Airways along with other parties including the Committee of Creditors to file a reply within two weeks and rejoinder, if by PNB, within one week.
While the SBI-led lenders' consortium is still working on ways to revive the once-storied Jet Airways, the civil aviation ministry has already awarded the carrier's slots at various airports to other airlines on a temporary basis.
Under the resolution plan, the lenders would end up having a sizable portion of shares in the airline, if their boards of directors agree to convert part of their debt into equity.
Jet Airways CEO-designate Sanjiv Kapoor on Monday said the new management does not want to be "in a rush" to restart operations while asserting that the airline will be unique and different. The ownership transfer of the airline under the insolvency resolution plan is facing hurdles over differences between the winning bidder and lenders. "We don't want to be in a rush," Kapoor said.
The All India Jet Airways Technicians Association cautioned that in case the allocation is not stopped, it would be forced to resort to legal means for a resolution.
The Supreme Court on Thursday directed Jalan-Kalrock consortium, the new owners of the cash-strapped Jet Airways, to deposit Rs 150 crore in SBI's escrow account by January 31, saying failure to do so will mean that the consortium is not in compliance with the terms of the resolution plan for reviving the airline. The top court, meanwhile, also refused to allow the separate plea of the Jet Aircraft Maintenance Engineers Welfare Association seeking payment of provident fund and gratuity dues, observing if additional money is awarded, the resolution plan will become "unworkable". The consortium, as per the lawyers for the workmen, has to pay over Rs 200 crore towards dues on account of PF and gratuity.
The creditors of the grounded carrier Jet Airways on Wednesday raised questions over the source of Rs 200 crore deposited by the Jalan-Kalrock Consortium before the insolvency appellate tribunal NCLAT and said it does not align with the resolution plan. Additional Solicitor General N Venkataraman, representing lenders including SBI and other banks, told the National Company Law Appellate Tribunal (NCLAT) that there are apprehensions about the source of funds, which deposited money for Jalan-Kalrock Consortium's (JKC). "The payment is not compliant with the resolution plan as it mandates that the money is to be paid through JKC," ASG submitted before a three-member NCLAT bench headed by chairperson Justice Ashok Bhushan.
US-based co-working operator WeWork, Lowe's India, SpiceJet and startups like CureFit stepped in to offer employment to the distressed workers at Jet.
After the August 10 deadline, South American conglomerate Synergy Group Corp reportedly evinced interest in the airline, forcing the RP to seek lenders' nod to extend the deadline to August 31. The Synergy Group owns a majority in Colombian carrier Avianca Holdings, which has a codeshare partnership with the state-run Air India.
The public sector oil marketing firm stopped supplying fuel to the cash-starved carrier from 12 noon Friday.
Banks want government to retain 40 per cent of Jet slots at all airports to ensure a new owner can kick-start operations soon after taking over.
After due deliberations, the lenders have decided to seek resolution for Jet Airways under the bankruptcy code since only a conditional bid was received.
The cash-strapped airline, which was grounded in April 2019, owes more than Rs 8,000 crore to banks, with those from the public sector having significant exposure.
In a dramatic turn of events in May 2019, an Emirates aircraft en-route to Dubai was asked to stop while it was taxiing for a take off in Mumbai. The pilot was given no reason and ordered to immediately return to the parking bay. As the aircraft returned to the terminal, two passengers from the first class - Naresh Goyal and his wife Anita - were offloaded by the immigration authorities, who said the duo cannot leave the country. Goyal, founder of Jet Airways, was stunned. The man, who ruled the aviation sector for two and a half decades with an iron hand, did not expect to be offloaded in this fashion.
The watchdog would also endeavour to do its best to help the company revive its operations within the set regulatory framework.
Banks are direct stakeholders and are dealing with commercial matters of the airline where the ministry would not like to intervene: Prabhu
"We will not let this company go down and will not tolerate this casual talk to dismantle this company piece by piece and give it as doles to airlines of your choice," an open letter said.
If all goes well, then every single employee of Jet Airways will become an owner of the airline.
The unions also suggested banks can extend special and exclusive loans to the airline to pay the salary dues or some subsistence payments to them against proper collateral.
Lenders are likely to convert part of the airline's debt into 11.4 crore shares at a consideration of Re 1 apiece as per RBI norms.
The pilot-turned-airline owner and his partner Biraja Jena plan to launch FlyBig, which has secured 16 routes under the fourth phase of UDAN, the government's regional connectivity programme.
When it was operational, Jet Airways had over 22,000 employees of them over 16,000 were on the rolls.
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